New borrower applies for a home loan rate with 25 barrels application – Check details to pay more
Although the RBI’s repurchase rate dropped to 5.5% (designed to reduce borrowing costs), the National Bank of India (SBI), the largest mortgage lender, raised the home loan rate by 25 basis points by 25 basis points.
The bank raised the upper band of interest rates by 25 basis points.
SBI’s home loan interest rate has increased from 7.50%-8.45% in the early stages to 7.50%-8.70% in the new band. As the maximum interest rate limit is raised, the new interest rate will particularly affect customers with lower credit scores.
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Loan rates for other banks
Loans offered by public sector banks such as United Bank of India, Bank of India, Bank of India, Bank of Maharashtra and Central Bank of India start at 7.35%, up to 10.10% or more based on borrower’s credit profile. Market experts suggest other public sector banks may follow SBI leadership.
Repurchase rates were cut three times in a row to reduce public relief. Lower repurchase rates at the Reserve Bank of India usually lead to lower interest rates for loans including home loans, thus benefiting the public indirectly.
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Loans linked to EBLR
The change will be felt the quickest, according to data edited by SBI Research (EBLR), which accounts for about 60% of all loans offered by the planned commercial banks (ASCBS).
As of August 2025, SBI home loans are primarily associated with the new borrower’s EBLR, which matches RBI’s repurchase rate and spread. Looking ahead, SBI warns that banks may continue to face pressure on their profit margins, although lower interest rates benefit from borrowers.
