SBI hikes home loan rates: What you should know
SBI has bumped up its home loan interest rates for new borrowers starting August 1, 2025.
The updated rates now range from 7.50% to 8.70%, with the higher end mainly hitting those with lower credit scores.
If you're already repaying a home loan, don't worry—this hike only affects new loans.
Other banks follow suit, shift away from low-margin loans
After SBI's move, other public sector banks like Union Bank of India have also raised their home loan rates (now at 7.45%).
This comes even though the Reserve Bank of India recently cut its repo rate to 5.5%.
Public banks seem to be shifting focus away from low-margin retail loans, with a renewed emphasis on more profitable segments, amid slowing home loan growth and margin pressures.
Public sector banks now handle 43% of new home loans
Despite pricier loans, SBI's home loan portfolio grew by 14% in FY25—outpacing private players like HDFC (8%) and Axis Bank (6%).
Public sector banks now handle a bigger chunk of new home loans (43% in FY25 vs. 34% in FY22), but overall growth in the market has slowed sharply this year.
Private banks' rates remain competitive
Private banks such as HDFC, ICICI, and Axis are keeping their starting rates competitive at around 7.90%-8.35%.
While HDFC saw slower growth thanks to tough competition, these lower rates could be worth checking out if you're planning to buy soon.