Buying a home is stressful enough—between paperwork, savings, and the constant worry of affordability. Now, the State Bank of India (SBI), the country’s largest public sector bank, has added another layer of concern by hiking home loan interest rates. The revision, effective August 1, 2025, directly impacts both new and existing borrowers.
What Changed in SBI Home Loan Rates?
Although the Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.55%, SBI raised the upper band of its home loan rates. The decision is driven by the bank’s need to cover credit risks, but for customers, it translates into higher EMIs and total payouts.
Real-Life Impact of the Rate Hike
Here’s how the change affects a borrower with a ₹50 lakh loan over 20 years:
| Interest Rate | EMI (₹) | Total Payment (₹) | Extra Cost (₹) |
|---|---|---|---|
| 8.45% (Old Rate) | 43,233 | 1.03 crore | – |
| 8.70% (New Rate) | 44,026 | 1.05 crore | 1.9 lakh more |
This means borrowers will pay ₹737 more every month, adding up to nearly ₹1.9 lakh extra in interest over the loan tenure.
Who Gets Which Rate?
SBI links home loan interest rates to two main factors:
- CIBIL Score: A higher score can bring borrowers closer to the lower end of the rate spectrum.
- External Benchmark Linked Rate (EBLR): Currently at 8.15%, this benchmark lets banks adjust spreads based on credit risk.
Key Questions for Borrowers
- When did the new rates start?
From August 1, 2025. - Will existing borrowers pay more?
Yes, if their loan is on a floating EBLR, the EMI will rise. - Can borrowers switch to another bank?
Yes. Loan transfer is possible if another bank offers better terms, though processing fees should be considered. - What’s the lowest SBI Home Loan rate?
It remains at 7.50%, but typically only for borrowers with excellent credit scores. - Should homebuyers wait?
If your budget is already stretched, delaying could be wise. However, if buying is urgent, factor in the higher EMI while planning.
