In the coming days, home loan borrowers may face higher interest costs.
The State Bank of India (SBI), the country’s largest government bank, has increased its home loan rates by 25 basis points for new borrowers.
This hike will mainly impact customers whose loan rates depend on their credit scores. Along with SBI, Union Bank of India has also raised its home loan rates.
New Interest Rates of SBI and Union Bank
Earlier in July, SBI’s home loan rates were between 7.5% and 8.45%. After the hike, the new range is 7.5% to 8.70%.
According to The Economic Times, this increase applies only to new borrowers. Existing customers will not be affected.
Union Bank of India has revised its home loan rates slightly, from 7.35% to 7.45%. However, both SBI and Union Bank have not issued an official statement on the changes yet.
When compared to private banks:
HDFC Bank: 7.90%
ICICI Bank: 8%
Axis Bank: 8.35%
Growth in Home Loan Market
Public sector banks are seeing strong growth in their home loan portfolios:
HDFC Bank: 7% growth (year-on-year, Q1)
ICICI Bank: 10.3% growth
SBI: 14% growth
Bank of Baroda: 18% growth (highest among them)
This trend shows that while private banks are also expanding, government banks are performing better in the home loan segment.
