SBI has increased home loan rates for new borrowers by 25 basis points to 7.50%-8.70%, despite the RBI’s repo rate cut, impacting especially those with lower credit scores.
Published Date – 16 August 2025, 01:43 PM
New Delhi: Despite the RBI’s repo rate cut to 5.5 per cent, aimed at easing borrowing costs, India’s largest mortgage lender, State Bank of India (SBI), has increased home loan rates by 25 basis points for new borrowers.
The bank raised the upper band of interest rates by 25 basis points. SBI’s interest rates for home loans have increased from the earlier band of 7.50 per cent-8.45 per cent to a new band of 7.50 per cent-8.70 per cent. The new rates will particularly impact customers with low credit scores, as the maximum interest rate limit has been raised.
Public sector banks like Union Bank of India, Bank of India, Bank of Maharashtra, and Central Bank of India offer loans starting at 7.35 per cent and going up to 10.10 per cent or more, depending on the borrower’s credit profile.
Other public sector banks may follow SBI’s lead. The repo rate was cut three times consecutively to provide relief to the public. The reduction in the repo rate by the RBI leads to lower interest rates on loans, including home loans, benefiting the public indirectly.
Other public sector banks may follow SBI’s lead. The repo rate was cut three times consecutively to provide relief to the public. The reduction in the repo rate by the RBI leads to lower interest rates on loans, including home loans, benefiting the public indirectly.
The bank had earlier released a report saying that the RBI’s cutting the repo rate will make home loans cheaper. The change will be felt most immediately in loans linked to the External Benchmark Lending Rate (EBLR), which account for around 60 per cent of all loans given by Scheduled Commercial Banks (ASCBs), as per the data compiled by State Bank of India (SBI) Research.
As of August 2025, SBI home loans predominantly link to the External Benchmark Lending Rate (EBLR) for new borrowers, aligning with the RBI’s repo rate plus a spread.
Looking ahead, SBI warned that although lower rates benefit borrowers, banks might continue to face pressure on their profit margins.
-
Nationwide Blackout Hits Cuba As Power Grid Collapses Again Amid Power Crisis
-
What Are The 9 Charges Against Udhayanidhi Stalin Over Remarks On Actor Trisha?
-
'A Matter Of Immense Pride': CM Omar Abdullah Congratulates Auqib Nabi As J&K Pacer Scripts History With Maiden India Test Team Selection
-
Reliance Jio, Airtel, Vi May Raise Mobile Tariffs By 12-15% In India Over Next Three To Four Months
-
Vijay Govt's First Tamil Nadu Budget Likely To Unveil ₹8,000 Student Aid, Free Higher Education & Major Education Reforms
