SBI Home Loan Interest Rates Slashed: Buying a Home Just Got Cheaper

Updated: 27-06-2025, 01.33 PM

New Delhi — In a welcome move for homebuyers across India, the State Bank of India (SBI), the country’s largest and most trusted public sector bank, has reduced its benchmark lending rates, making home loans significantly more affordable. The decision is expected to ease the financial burden on both existing and new borrowers, offering them lower EMIs and better repayment flexibility.

Aadhaar card will provide loan at 2% interest

Home Loans Now Start at 7.50% Interest

SBI has announced a substantial reduction in its home loan interest rates, bringing them down by up to 0.50%. With this revision, new home loan rates will now start from just 7.50% per annum, offering a more attractive financing option to aspiring homeowners.

This reduction benefits both new applicants and existing borrowers whose loans are linked to SBI’s external benchmark lending rate. The lowered rate will also make monthly installments (EMIs) lighter, making it easier for middle-income families to invest in housing.

MCLR Remains Unchanged

While the home loan interest rates have come down, SBI has decided to keep its Marginal Cost of Funds Based Lending Rate (MCLR) unchanged for now. The current MCLR structure is as follows:

Overnight and 1-month MCLR: 8.20%
3-month MCLR: 8.55%
6-month MCLR: 8.90%
1-year MCLR: 9.00%
2-year MCLR: 9.05%
3-year MCLR: 9.10%

These rates continue to serve as the benchmark for several types of fixed-rate loans and are particularly important for corporate and business borrowers.

External Benchmark Rate (EBR) Reduced to 8.15%

SBI has also lowered its External Benchmark Rate (EBR) from 8.65% to 8.15%. The EBR is a critical metric, especially for floating rate loans, including home and MSME loans. This adjustment directly impacts borrowers linked to the Repo Linked Lending Rate (RLLR) system, which uses the RBI’s repo rate as a base.

With this move, customers who have opted for floating-rate loans tied to the RLLR can expect their interest rates—and consequently their EMIs—to go down during their next reset period. However, this reduction will not apply to borrowers with fixed-rate loans.

How Repo Rate Affects RLLR-Based Loans

The RLLR is a dynamic lending mechanism that adjusts according to the Reserve Bank of India’s repo rate. When the RBI cuts the repo rate, the RLLR—and hence the loan interest rates—are also revised downward. Banks add a fixed margin to the repo rate to account for operational costs and margins.

As a result, any reduction in repo rate benefits RLLR-linked borrowers almost immediately, offering them lower interest costs and potentially faster loan repayment.

Conclusion

SBI’s latest decision to cut home loan rates is a timely relief for Indian families dreaming of owning a house. With inflationary pressures and real estate prices gradually rising, this move is likely to spur home buying activity across urban and semi-urban centers. For many, this may be the ideal time to take the plunge into homeownership with the backing of India’s most trusted bank.

Author Profile

Kuldeep Singh Chundawat: My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.