SBI Raises Home Loan Rates: 7+ Banks Offering Cheaper EMI Deals in 2025

SBI Raises Home Loan Rates: Are you planning to buy your dream home in 2025 but worried about rising loan costs? The recent news of SBI Raises Home Loan Rates has sent shockwaves through the Indian housing market, making new borrowers rethink their plans. SBI Raises Home Loan Rates once again, bringing a direct impact on new borrowers as well as existing customers. According to the latest update, SBI Raises Home Loan Rates by a few basis points, which could increase the monthly EMI burden. Experts believe that whenever SBI Raises Home Loan Rates, the housing market sees a shift in demand and affordability. For salaried individuals, SBI Raises Home Loan Rates means re-planning their household budget.

Analysts say that this step comes after changes in the repo rate, and every time SBI Raises Home Loan Rates, it makes headlines in the financial sector. Effective August 1, 2025, the State Bank of India (SBI), India’s largest lender, increased its home loan rates by 25 basis points, pushing the upper limit to 8.70%. This hike means higher EMIs for new borrowers, especially those with lower credit scores. But don’t lose hope! Several other banks are offering competitive rates to keep your homeownership dreams affordable. In this article, we’ll explore why SBI Raises Home Loan Rates, the impact on your EMIs, and seven banks with cheaper EMI deals in 2025 to help you save big.

Why Did SBI Raise Home Loan Rates?

Despite the Reserve Bank of India (RBI) cutting the repo rate to 5.5% to ease borrowing costs, SBI decided to hike the upper end of its home loan interest rate range from 8.45% to 8.70% for new borrowers. This move, reported by The Economic Times, reflects the bank’s strategy to manage profit margins and assess credit risks amid rising property prices. The lower limit remains at 7.50%, meaning borrowers with excellent credit scores may still secure lower rates. However, those at the higher end of the spectrum face increased EMIs, adding financial strain.

Impact on Borrowers

The SBI Raises Home Loan Rates decision directly affects new home loan applicants. For example:

• On a ₹30 lakh loan with a 20-year tenure, the EMI at 8.45% was ₹25,830. At the new rate of 8.70%, it rises to ₹26,278—a ₹450 monthly increase.
• Over the loan’s lifetime, this translates to an additional ₹1 lakh in total repayment.
• Larger loans, like ₹50 lakh, see even steeper increases, with EMIs jumping by ₹737 monthly, adding over ₹1.76 lakh over 20 years.

This hike makes it crucial for borrowers to explore other banks offering lower rates to keep EMIs manageable.

7+ Banks Offering Cheaper EMI Deals in 2025

While SBI Raises Home Loan Rates, several public and private sector banks are providing competitive home loan rates starting as low as 7.35%. Here’s a curated list of seven banks with affordable EMI deals in 2025, based on recent reports from sources like Financial Express and News18.

1. Bank of Baroda (BoB)

• Interest Rate: 7.45%–9.20%
• Key Features: Rates depend on loan amount, CIBIL score, and credit insurance. Offers balance transfer options.
• Why Choose?: BoB’s lower-end rate of 7.45% is ideal for borrowers with high credit scores, ensuring lower EMIs than SBI’s 8.70%.

2. Punjab National Bank (PNB)

• Interest Rate: 7.45%–10.25%
• Key Features: Flexible tenures and rates based on loan size. Special schemes for women borrowers.
• Why Choose?: PNB’s starting rate matches BoB, making it a strong alternative for cost-conscious buyers.

3. Union Bank of India

• Interest Rate: 7.35%–10.10%
• Key Features: Linked to External Benchmark Lending Rate (EBLR), ensuring quick rate adjustments with RBI repo changes.
• Why Choose?: Offers one of the lowest starting rates, perfect for budget-friendly EMIs.

4. Bank of Maharashtra

• Interest Rate: 7.35%–10.10%
• Key Features: Transparent pricing and minimal processing fees.
• Why Choose?: Competitive rates and customer-friendly policies make it a hidden gem for home loans.

5. Canara Bank

• Interest Rate: 7.40%–10.25%
• Key Features: Offers home loans, balance transfers, and renovation loans.
• Why Choose?: Slightly lower starting rate than SBI, with flexible repayment options.

6. HDFC Bank

• Interest Rate: 7.90%–9.80%
• Key Features: Includes balance transfer and renovation loans. Quick approval process.
• Why Choose?: Known for excellent customer service and slightly lower upper-end rates than SBI’s 8.70%.

7. ICICI Bank

• Interest Rate: 7.70%–9.80%
• Key Features: Customized rates based on loan amount and borrower profile.
• Why Choose?: Competitive starting rates and digital loan application process.

Comparison Table

Tips to Secure the Best Home Loan Deal

To navigate the SBI Raises Home Loan Rates scenario and find cheaper EMIs, follow these practical tips:

• Check Your CIBIL Score: A score above 750 can help you secure rates closer to the lower end (e.g., 7.35% with Union Bank).
• Compare Banks: Use platforms like BankBazaar or Paisabazaar to compare rates and calculate EMIs.
• Consider Balance Transfer: If you’re an existing borrower, transferring your loan to banks like BoB or PNB can reduce your EMI burden.
• Negotiate Fees: Ask about processing fees and prepayment penalties, which vary across banks.
• Monitor RBI Updates: Since most loans are linked to the EBLR, future repo rate cuts could lower rates further.

How to Apply for a Home Loan

1. Research: Shortlist banks based on interest rates and eligibility criteria.
2. Check Eligibility: Use online calculators on bank websites to assess loan amounts and EMIs.
3. Submit Documents: Provide income proof, ID, address proof, and property documents.
4. Apply Online: Visit bank websites like HDFC Bank or ICICI Bank for digital applications.
5. Track Status: Monitor your application through the bank’s portal or customer care.

Conclusion

The news of SBI Raises Home Loan Rates has made homeownership costlier for new borrowers, with EMIs rising by hundreds or thousands monthly. However, banks like Union Bank of India, Bank of Maharashtra, and Canara Bank are offering cheaper EMI deals starting as low as 7.35%, helping you save significantly over your loan tenure. By comparing rates, improving your credit score, and exploring balance transfer options, you can keep your home loan affordable. Have you been affected by SBI’s rate hike, or are you considering a loan from another bank? Share your thoughts in the comments below, and subscribe to our newsletter for more financial tips and updates!