Home Loan Rates : India’s housing finance market is witnessing another round of interest rate adjustments as the country’s largest lender, the State Bank of India (SBI), has revised its home loan rates upward. Effective from 1 August 2025, SBI has increased the home loan interest rates by 25 basis points, raising it from 8.45% to 8.70%. This move comes despite the Reserve Bank of India (RBI) maintaining its key repo rate at 5.55% during its latest monetary policy review in August 2025.
The rate hike will impact both new borrowers and those seeking balance transfers, making home loans costlier for customers at the higher end of the rate band. While SBI’s lower limit remains unchanged at 7.50%, the increased upper band means some customers, depending on their credit score and risk profile, will pay more in EMIs.
Let’s compare SBI’s revised home loan interest rates with those of other leading banks.
SBI Home Loan Interest Rates
- Current rate range: 7.50% to 8.70%
- Hike of 25 basis points on the interest (from 8.45% earlier).
- Rates vary depending on type of loan, tenure, and user credit profile.
- SBI continues to be a preferred choice for many borrowers because of its wide reach and transparent loan processing. However, the recent hike slightly increases the repayment burden for new borrowers availing loans at the higher end of the spectrum.
- HDFC Bank Home Loan Rates
HDFC Bank offers home loans starting at 7.90% per annum. The rates apply across different categories including:
- Home loans
- Balance transfer loans
- Renovation loans
- Extension loans
- HDFC’s rates are competitive, especially for salaried borrowers with strong credit histories. Customers with higher risk profiles may be charged more.
- ICICI Bank Home Loan Rates
ICICI Bank provides both fixed and floating rate home loans up to ₹5 crore. The key highlights include:
- Starting interest rate: 7.70% per annum
- Salaried individuals profile : 8.75% – 9.40%
- Self-employed: 8.75% – 9.55% (up to ₹35 lakh)
- For loans between ₹35 lakh – ₹75 lakh:
- Salaried: 8.75% – 9.55%
- Self-employed: 8.75% – 9.70%
- For loans above ₹75 lakh:
- Salaried: 8.75% – 9.65%
- Self-employed: 8.75% – 9.80%
- ICICI’s slab-based system ensures interest rates are linked closely to the loan size and borrower type, making it important for customers to compare carefully before applying.
Kotak Mahindra Bank Home Loan Rates
Kotak Bank offers home loans at 7.99% per annum. Existing customers who wish to switch from a floating rate to a fixed rate must bear a much higher cost, with fixed rates at 12% per annum.
Bank of Baroda (BoB) Home Loan Rates
- Bank of Baroda’s offer home loan at interest rates between 7.45% and 9.20%, depending on Applicant’s profile (salaried or non-salaried)
- CIBIL credit score
- Loan size and tenure
- Additionally, a 0.05% risk premium is charged for customers who do not opt for credit insurance. This makes BoB slightly more expensive for uninsured borrowers.
Punjab National Bank (PNB) Home Loan Rates[Related-Posts]
PNB currently offers home loans starting at 7.45% per annum. Interest rates vary based on the borrower’s credit score, loan size, and repayment period. For customers with strong financial credentials, PNB continues to remain one of the most affordable options.
Canara Bank Home Loan Rates
Canara Bank’s home loan rates are among the most flexible from 7.40% to 10.25%. While the starting rates are attractive, customers with lower credit scores or higher-risk profiles may end up paying closer to the higher end of this wide band.
What the Rate Hike Means for Borrowers
- The increase in SBI’s home loan rates is significant for prospective borrowers and existing customers looking for balance transfers. A rise in the interest rate directly impacts Equated Monthly Instalments (EMIs). For example:
- A loan of ₹50 lakh over 20 years at 8.45% interest results in an EMI of approximately ₹43,000.
- At 8.70%, the EMI increases to nearly ₹44,200 – translating to an additional ₹1,200 per month or more than ₹2.8 lakh over the loan tenure.
- This increase highlights the importance of comparing offers across multiple banks. A small difference in interest rate can have a large long-term financial impact.
Conclusion
With SBI raising its upper home loan interest rate to 8.70%, the competition among Indian banks is intensifying. Borrowers now have a wide range of options, with Canara Bank and PNB starting at around 7.40–7.45%, while HDFC, ICICI, and Kotak Mahindra offer slightly higher but structured rates.
Prospective borrowers should carefully evaluate not just the interest rate, but also additional charges, risk premiums, and loan terms before making a decision. Given the current rate environment, even a 0.25% difference in interest can translate into significant savings or costs over the life of a long-term home loan.
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