SBI Home Loan Rates Hiked by 25 Basis Points: Key Updates for August 2025

New Delhi, August 17, 2025 — State Bank of India (SBI), India’s largest lender, has raised home loan interest rates by 25 basis points, effective August 1, 2025, impacting new borrowers seeking housing finance. The revised rates for regular home loans (term loans) now range from 7.50% to 8.70%, up from 7.50% to 8.45%, as reported by Livemint and The Economic Times. This move comes despite the Reserve Bank of India (RBI) maintaining the repo rate at 5.55% in its August 2025 Monetary Policy Committee meeting, reflecting banks’ efforts to protect margins amid a 9.6% home loan growth rate, down from 36.3% last year.

Check More Update at SBI Home Loan

Updated SBI Home Loan Interest Rates

SBI’s official website lists the new rates for home loans and related products:

• Regular Home Loan (Term Loan): 7.50% - 8.70%
• Home Loan Maxgain (Overdraft): 7.75% - 8.95%
• Top Up Loan: 8.00% - 10.75%
• Top Up (Overdraft) Loan: 8.25% - 9.45%
• Loan Against Property (P-LAP): 9.20% - 10.75%
• Reverse Mortgage Loan: 10.55%
• YONO Insta Home Top-Up Loan: 8.35%

These rates, tied to the External Benchmark Lending Rate (EBLR) at 8.15%, vary based on the borrower’s CIBIL score. Those with scores below 750 may face higher mortgage rates, increasing their home loan EMI burden.

RBI Context and Market Trends

As of August 17, 2025, no new RBI notifications were issued today, per the RBI’s official website. The latest Weekly Statistical Supplement (August 15, 2025) confirms the repo rate’s stability at 5.55% after a 100-basis-point cut since February 2025. Union Bank of India also raised its rates to 7.45% from 7.35% in July 2025, signaling a trend among public sector banks to adjust spreads amid slowing housing loan demand.

Impact on Borrowers

The 25-basis-point hike affects new borrowers, particularly those with lower credit scores. For a ₹50 lakh home loan over 20 years at 8.70%, the monthly EMI is ₹44,026, totaling ₹1,05,66,240 (including ₹55,66,240 in interest). At the previous 8.45%, the EMI was ₹43,233, totaling ₹1,03,75,920. This adds ₹793 monthly or ₹1,90,320 over the loan term. For a ₹1 crore loan, the EMI rises from ₹86,466 to ₹88,052, increasing costs by ₹3.8 lakh.

How SBI Compares to Other Banks

SBI remains competitive, but other banks offer alternatives:

• Canara Bank: 7.40% - 10.25%
• Punjab National Bank: 7.45% - 9.80%
• Bank of Baroda: 7.45% - 9.20%
• Central Bank of India: 7.35% onwards
• HDFC Bank: 7.90% - 9.80%
• ICICI Bank: 7.70% - 9.80%
• Kotak Mahindra Bank: 7.99% onwards

Analysts predict banks like Bank of Baroda may follow SBI’s lead due to deposit growth pressures.

Relief for Existing Borrowers

SBI reduced its Marginal Cost of Lending Rate (MCLR) by up to 5 basis points for select tenures, effective August 15, 2025, ranging from 7.90% to 8.85%. This could lower EMIs for existing MCLR-linked borrowers at their next reset.

Broader Economic Implications

The rate hike aligns with broader economic trends, as banks face challenges from a 5.8% deposit growth rate in 2025, significantly lower than the 10.6% credit growth, per RBI’s June 2025 data. This mismatch pressures banks to increase lending rates to maintain net interest margins, especially as housing demand weakens due to rising property prices and inflation concerns. SBI’s home loan portfolio, which grew 14.26% year-on-year to ₹7.92 lakh crore by December 2024, is under scrutiny as disbursals slow, prompting strategic rate adjustments to balance risk and profitability.

Government Initiatives and Borrower Options

Government schemes like the Pradhan Mantri Awas Yojana (PMAY) continue to support first-time homebuyers, offering interest subsidies of up to 6.5% for eligible households earning up to ₹18 lakh annually. Borrowers can also explore festive season offers expected in October 2025, which may include waived processing fees or rate discounts from banks like ICICI or HDFC. Tools like online EMI calculators and platforms such as BankBazaar help borrowers compare housing loan eligibility and plan finances effectively.

Tips for Home Loan Applicants

• Boost CIBIL Score: Aim for 750+ to secure lower mortgage rates.
• Compare Lenders: Use BankBazaar or Wishfin to check housing loan eligibility.
• Balance Transfer: Existing borrowers can transfer loans to banks with better rates.
• Leverage PMAY: Eligible first-time buyers can benefit from Pradhan Mantri Awas Yojana subsidies.
• Use EMI Calculators: Assess affordability with online home loan EMI calculators.

Outlook for Borrowers

With no imminent RBI rate cuts, mortgage rates may stay elevated. The festive season could bring promotional offers, so timing applications strategically may save costs. Visit SBI’s official website or branches for personalized housing loan eligibility details. Stay updated on banking news and mortgage rates for informed decisions.

Tags: SBI home loan, mortgage rates, home loan EMI calculator, RBI repo rate, housing finance, CIBIL score, loan against property, reverse mortgage loan, top up home loan, EBLR rates, banking news India