SBI cuts home loan rates by 0.25%:Interest rates now start at 7.25%; check lending costs of other banks and how much your EMI could reduce

State Bank of India (SBI) has reduced its home loan interest rates by 0.25%, making borrowing cheaper for both new and existing customers. Following the cut, SBI’s home loan rates will now start from 7.25% per annum. The rate reduction comes after the Reserve Bank of India (RBI) lowered the repo rate from 5.50% to 5.25%. In response, banks have begun passing on the benefit by cutting interest rates on loans and fixed deposits. Earlier, several major banks—including HDFC Bank and Punjab National Bank—had also reduced home loan rates by up to 0.25%. EMI To Reduce After 0.25% Cut Home loan interest rates depend on factors such as credit score, loan amount, tenure, and loan-to-value ratio. For instance, if your loan rate was earlier 8%, it will now reduce to 7.75% after the cut. Both new borrowers and existing customers with floating-rate loans will benefit. Who Will Benefit From the Cut? This reduction will mainly benefit borrowers whose loans are linked to the Repo Linked Lending Rate (RLLR). How Repo Rate Cuts Affect Home Loans Banks set loan rates based on RLLR, which is linked to the repo rate. Example: When the repo rate falls, RLLR also comes down, leading to lower loan interest rates. Key Questions Answered 1. Will old and new borrowers get the same benefit?
Floating-rate loans are periodically reset as per RBI rules, so existing borrowers will automatically get the benefit. However, banks may adjust their margins for new borrowers, so the full benefit may not always be passed on. 2. Can fixed-rate borrowers switch to floating rate?
Yes. Borrowers with fixed-rate or MCLR-linked loans can switch to RLLR by approaching their bank, though a processing fee may apply. Switching early in the loan tenure can result in significant long-term savings. RBI has cut repo rate three times this year The RBI has reduced the repo rate by a total of 1% in three cuts this year—starting with a reduction from 6.5% to 6.25% in February, followed by another 0.25% cut in April, and the latest reduction now. Things to Keep in Mind Before Taking a Home Loan ​