SBI Home Loan: In a welcome move for home loan customers, the State Bank of India (SBI) has announced a reduction in its lending rates, leading to lower EMIs for borrowers. This decision comes after the Reserve Bank of India (RBI) cut the repo rate by 0.25%, bringing it down to 6.25%.
Why Are EMIs Decreasing?
The reduction in RBI’s repo rate has prompted SBI to revise its loan interest rates:
- EBLR (External Benchmark Lending Rate) reduced from 8.90% to 8.65%
- RLLR (Repo Linked Lending Rate) reduced from 8.50% to 8.25%
Borrowers with floating-rate home loans will automatically benefit from this change, seeing a reduction in their monthly installments. However, the final interest rate may vary slightly after adding the Credit Risk Premium (CRP).
Here’s a well-structured table summarizing SBI’s home loan rate cuts and their impact:
SBI Home Loan Rate Reduction – Key Details (April 2025)
| Parameter | Previous Rate | New Rate | Change | Impact on Borrowers |
|---|---|---|---|---|
| RBI Repo Rate | 6.50% | 6.25% | -0.25% | Basis for bank rate cuts |
| SBI EBLR (External Benchmark Rate) | 8.90% | 8.65% | -0.25% | Floating rate loans become cheaper |
| SBI RLLR (Repo Linked Rate) | 8.50% | 8.25% | -0.25% | Direct benefit to repo-linked loans |
| Sample EMI Reduction (₹30L loan) | ~₹26,000 | ₹25,200-₹25,700 | ₹300-₹800 less | Monthly savings for borrowers |
| Effective Date | Immediate | April 2025 | – | Automatic adjustment for floating rates |
| Fixed Rate Loans | No change | No change | – | Borrowers need to refinance for benefits |
Comparison With Other Banks
| Bank | Rate Before | Rate After | Change |
|---|---|---|---|
| SBI | 8.90% | 8.65% | -0.25% |
| Bank of Maharashtra | 8.85% | 8.60% | -0.25% |
| PNB | 9.00% | 9.00% | No change |
Note: Rates may vary based on credit profile and loan amount. CRP (Credit Risk Premium) additional in all cases.
How Much Will EMI Reduce?
For example:
- A ₹30 lakh home loan with an earlier EMI of around ₹26,000 could now see a reduction of a few hundred to a thousand rupees, depending on the loan tenure and remaining balance.
- The exact savings will vary, but all floating-rate borrowers will experience some relief in their monthly payments.
How Does the Repo Rate Affect Home Loans?
Most banks, including SBI, link their lending rates to the RBI’s repo rate. When the repo rate decreases:
- Floating-rate loans become cheaper, reducing EMIs.
- Fixed-rate loans remain unchanged unless renegotiated.
This adjustment is part of RBI’s strategy to boost economic growth by making borrowing more affordable.
Other Banks Following Suit
SBI isn’t alone—other public sector banks like Bank of Maharashtra have also cut rates by 0.25%, signaling a broader trend in the banking sector.
What Should Borrowers Do?
- Floating-rate borrowers: No action needed—your bank will automatically adjust your EMI.
- Fixed-rate borrowers: Check with your bank to explore refinancing options.
Final Takeaway
SBI’s rate cut brings much-needed relief to home loan borrowers, easing monthly financial burdens. If you’re an SBI customer, expect lower EMIs soon—giving your budget a breather.
