Buying a dream home is one of the biggest financial decisions for most Indians, and home loan interest rates play a vital role in making that dream affordable. On August 1, 2025, the State Bank of India (SBI), India’s largest public sector bank, announced a hike in home loan rates—a move that is expected to impact both new borrowers and existing customers.
Even though the Reserve Bank of India (RBI) kept its repo rate unchanged at 5.55% in the August Monetary Policy, SBI decided to raise its upper home loan interest rate band by 25 basis points, taking it from 8.45% to 8.70%. The lower band remains steady at 7.50%.
So, how will this affect your EMIs, affordability, and future borrowing decisions? Let’s break it down and also compare what other top Indian banks like HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Bank of Baroda, Punjab National Bank, and Canara Bank are offering right now.
SBI’s New Home Loan Rates Explained
Effective Date: August 1, 2025
Revised Range: 7.50% – 8.70% p.a.
Who Gets Affected Most?
New borrowers
Customers with low credit scores
Those seeking higher loan amounts
SBI’s decision, despite the RBI’s unchanged repo rate, shows the bank’s strategy to balance risk and profitability. For existing borrowers on floating rates, this hike could either increase monthly EMIs or extend loan tenure.
Current Home Loan Interest Rates from Top Banks
Here’s a quick comparison of India’s leading banks after SBI’s move:
1. HDFC Bank Home Loan Rates
Starting from 7.90% p.a.
Applies to:
Regular Home Loans
Balance Transfer Loans
Home Renovation Loans
Extension Loans
Linked to repo rate, making it a floating-rate option.
2. ICICI Bank Home Loan Rates
Starting from 7.70% p.a. (for loans up to ₹5 crore)
Salaried Borrowers:
Up to ₹35 lakh → 8.75% – 9.40%
₹35–75 lakh → 8.75% – 9.55%
Above ₹75 lakh → 8.75% – 9.65%
Self-Employed Borrowers:
Rates slightly higher (up to 9.80%)
3. Kotak Mahindra Bank Home Loan Rates
Starting from 7.99% p.a.
Offers both fixed and floating rates
Fixed rate switch for existing customers → 12% p.a.
4. Bank of Baroda Home Loan Rates
Range: 7.45% – 9.20%
Based on CIBIL score & loan size
Additional 0.05% risk premium if no credit insurance is taken
5. Punjab National Bank (PNB) Home Loan Rates
Starting from 7.45% p.a.
Rates vary by:
Loan amount
Borrower’s CIBIL score
Loan tenure
6. Canara Bank Home Loan Rates
Range: 7.40% – 10.25%
Interest depends on borrower’s profile and loan amount
What Does a Home Loan Rate Hike Mean for You?
When interest rates increase, it directly impacts the cost of borrowing. Here’s how:
Higher EMIs 💸
Borrowers with floating-rate loans may see an increase in monthly EMI.
Extended Loan Tenure ⏳
Some banks may keep EMIs constant but extend the repayment period, which means you pay more interest overall.
Higher Affordability Burden for New Borrowers 🏠
From day one, new borrowers will pay higher EMIs, reducing overall affordability.
📝 Key Takeaway for Borrowers
Even if the RBI keeps rates steady, banks like SBI can independently adjust their loan interest rates. This means:
Always compare multiple lenders before choosing.
Maintain a strong CIBIL score to get the lowest possible rate.
Consider factors like processing fees, tenure flexibility, and floating vs. fixed options.
A small difference of 0.25% in interest rate can significantly impact your total repayment amount over a 20–25 year loan tenure.
✅ Conclusion
The SBI home loan rate hike highlights how dynamic the Indian lending market is. With HDFC, ICICI, Kotak, Bank of Baroda, PNB, and Canara Bank all offering different rates, smart borrowers should compare options, check their credit scores, and pick the best-fit lender.
If you’re planning to buy a home or already repaying one, now is the time to re-evaluate your EMI structure and explore refinancing options if needed.