State Bank of India has raised its lending rates by 15 basis points. That's according to reporting by Free Press Journal. The report says home loan borrowers may pay a little more in EMIs from October.
A basis point is one-hundredth of a percent, so 15 basis points is 0.15%. It sounds tiny. But on a big loan that runs for 20 years, it adds up. Here's what it could mean for you.
Key takeaways
- SBI has reportedly raised lending rates by 15 basis points, or 0.15%.
- Home loan EMIs may go up slightly from October.
- On a ₹50 lakh loan, the rise could be about ₹470 a month.
- Exact changes depend on your loan type and reset date.
- You can still compare offers and use prepayments to cut the impact.
How a lending rate hike works
Your home loan has an interest rate. That's the price you pay the bank for borrowing its money. When the bank raises its lending rate, the loans linked to it become a little more costly.
The EMI is your fixed monthly payment. It covers some interest and some repayment of the loan. Banks usually keep the EMI the same and stretch the tenure when rates rise, or they raise the EMI. Either way, you pay more in total.
Not every loan changes on the same day. Floating-rate loans reset on dates set in your loan agreement. Fixed-rate loans don't change until the fixed period ends.
What changes for home loan borrowers
Let's use a simple example. Say you have a ₹50 lakh home loan for 20 years. Your rate moves from 8.50% to 8.65%. These are illustrative numbers, not SBI's actual rates.
At 8.50%, the EMI is about ₹43,390. At 8.65%, it's about ₹43,865. That's roughly ₹470 more every month. Over 20 years, you'd pay about ₹1.13 lakh extra.
| Loan amount | Extra EMI per month | Extra cost over 20 years |
|---|---|---|
| ₹25 lakh | About ₹236 | About ₹56,600 |
| ₹50 lakh | About ₹472 | About ₹1.13 lakh |
| ₹75 lakh | About ₹708 | About ₹1.70 lakh |
The table assumes a 0.15% rise on a 20-year loan, starting near 8.5%. Your numbers will differ. Use our EMI calculator to plug in your own loan.
Who is affected
The people who feel it most are borrowers on floating-rate loans linked to the bank's benchmark. If your loan resets in the coming months, you'll see the change at that point.
New borrowers are affected too. A fresh loan sanctioned after the change may come with a slightly higher rate. People with small balances or short remaining tenures will notice very little.
Borrowers with loans from other banks aren't directly hit. But other lenders often watch what the biggest bank does. They may follow in time. You can see where rates stand across lenders on our interest rates page.
What to do now
You don't need to panic. A few calm steps can protect your budget.
- Check your loan statement for the current rate and next reset date.
- Use an EMI calculator to see your new payment.
- Ask your bank how the change will show up: higher EMI or longer tenure.
- Make a small prepayment if you have spare cash. It cuts interest the most early in the loan.
- If you're planning a new loan, compare offers before you sign.
Our home loan guides explain prepayment and balance transfer in simple steps. For more updates like this, visit the news hub.
Frequently asked questions
What is a basis point?
A basis point is one-hundredth of one percent. So 100 basis points make 1%. A 15 basis point rise means 0.15%.
Will my EMI go up right away?
Not always. Floating-rate loans change on the reset date in your agreement. Some banks keep your EMI the same and stretch the tenure instead.
Should I switch my home loan to another bank?
Not only because of a 0.15% rise. Switching has fees and paperwork. Compare the total savings against those costs first.
BankCreds analysis
This hike is small, and it's easy to over-read it. A 0.15% rise doesn't make your home loan unaffordable. For most salaried families, about ₹470 a month on a ₹50 lakh loan is a squeeze, not a crisis.
The bigger point is the direction. Rates that creep up in small steps matter more for new borrowers who haven't signed yet. They can still compare lenders and pick the better offer.
What to do this week
If you already have a loan, check which benchmark your rate follows and when it resets. If you're about to borrow, ask two or three banks for written offers. A gap of 0.25% between lenders is often bigger than this hike.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Source & references
- Free Press Journal — originating report https://www.freepressjournal.in/business/sbi-hikes-lending-rates-by-15-basis-points-heres-how-much-extra-you-may-pay-on-home-loan-emis-from-october-15
Source links are shown as plain text, not clickable links. Copy a URL into your browser to read the original report.
Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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