Archive · 16 Aug 2025
SBI Increases Home Loan Rates Despite RBI's Rate Cuts
SBI, a big bank in India, raised the interest rates on new home loans, meaning new borrowers will pay more.
This happened even though the central bank lowered a key interest rate to make borrowing cheaper.
SBI is raising the rates to protect its profits and has warned of tough times ahead.
This change affects loans and impacts people with lower credit scores.
Other banks might follow SBI's move.
SBI increased home loan rates for new borrowers by 25 basis points.
The upper band of SBI's home loan interest rates increased to 7.50% - 8.70%.
The rate increase impacts those with low credit scores the most.
SBI's action contradicts the RBI's repo rate cuts aimed at lowering borrowing costs.
SBI warned of pressure on profit margins despite lower rates.
- Who
- SBI and new home loan borrowers.
- What
- SBI increased home loan rates for new borrowers.
- When
- Not specified, but after RBI rate cuts.
- Where
- India
- Why
- To protect bank profit margins.
RBI's Perspective
SBI's Perspective
Interest Rate Discrepancy
RBI's Perspective
RBI cut the repo rate to lower borrowing costs.
SBI's Perspective
SBI increased home loan rates for new borrowers.
- SBI New Home Loan Rate Range
- 7.50% - 8.70%
- RBI Repo Rate
- 5.5%
- Home Loans Linked to EBLR
- 60% of all loans
Sources
RBI considers reducing risk weights for auto loans
SBI, Bank of Baroda and Indian Overseas Bank reduce MCLR
SBI, Indian Overseas Bank cut MCLR across tenures
SBI and Indian Overseas Bank Slash MCLR Rates Across Tenures, Benefiting Borrowers