SBI Increased Home Loans Interest Rates: State Bank of India (SBI), the biggest bank in the nation, increased interest rates on home loans for new borrowers starting in August 2025. The decision was made prior to the August 4-6 Reserve Bank of India (RBI) MPC meeting. Following the monetary policy meeting, the repo rate stayed at 5 percent.
Customers of home loans and other loans have benefited from the RBI’s 100 basis point (bps) reduction in the repo rate since February 2025. However, the RBI stated in August that additional cuts are not likely at this time. SBI’s interest rate increase may mark the start of a new trend in the housing finance market under such circumstances.
SBI Increased Home Loans Interest Rates
| Aspect | Details |
| SBI Rate Change | 7.50% to 8.70% (from August 2025) |
| RBI Repo Rate | 5.55% (unchanged, August 2025) |
| Lowest Bank Rate | Canara Bank at 7.40% |
| Highest Bank Rate | Kotak Mahindra at 12% (fixed switch) |
| Helpline | 1800-425-3800 (SBI) |
SBI Home Loan Interest Rates August 2025
The maximum interest rate for home loans has been increased by 25 basis points to 8% by SBI. It was 8.45 percent earlier. The reduced interest rate, however, is still at 7 percent. In other words, depending on their credit profile and loan amount, new customers will now be required to pay interest rates ranging from 7 to 70 percent.
Home Loan Interest Rates Of Other Banks
After SBI, let’s see what other big banks have to offer.
- 7.45 percent to 9.20 percent for Bank of Baroda (BoB). The loan amount, CIBIL score, and credit insurance coverage all affect interest rates.
- Interest rates on home loans from Punjab National Bank (PNB) start at 7.35%. Rates vary depending on tenure and amount.
- Interest rates at Canara Bank range from 7 percent to 10 percent.
- HDFC Bank: 7 percent is the starting point. This covers loans for home improvements, balance transfers, and extensions.
- Interest rates at ICICI Bank start at 7 percent, but they can go as high as 8 percent or as low as 9 percent, depending on the loan amount and the customer’s characteristics.
- Interest rates at Kotak Mahindra Bank begin at 7.09%. Rate up to 12.
Impact On Clients
EMI is directly impacted by an increase in interest rates. Over time, this minor increase will raise the loan’s overall cost by lakhs of rupees. According to experts, this increase suggests that banks’ interest rates may tighten in the future, particularly if inflation pressures continue to mount and the RBI is compelled to raise rates rather than maintain them at their current level.
A Note For Clients
- Only after comparing interest rates should you decide to take out a new home loan.
- To get a loan with a lower interest rate, maintain a high CIBIL score.
- If an existing customer is receiving a better rate from another bank, they may choose to transfer their balance.
SBI’s interest rate increase indicates that the days of low home loan rates are gradually ending. Banks are now concentrating on risk and margin even though the RBI has maintained the repo rate at a steady level. Homebuyers and those taking out loans must exercise caution and carefully plan their finances in such a scenario.