State Bank of India has raised interest rates on select home loans by 25 basis points, increasing borrowing costs for customers whose loans are linked to the bank’s external benchmark-linked rate or repo-linked lending rate. The revised rates took effect on 15 October 2026.
The increase means affected borrowers may have to pay higher monthly instalments or accept a longer repayment period, depending on the options available under their loan agreements. The impact will vary according to the outstanding principal, applicable interest rate and remaining tenure.
SBI’s regular home loan interest rates now range from 7.50% to 8.80%, according to the report. Interest rates for the bank’s Maxgain home loan product range from 8% to 9.30%. Top-up loan rates are between 8% and 10.75%, while top-up overdraft loan rates range from 8.50% to 11.25%.
The revision does not apply uniformly to every SBI home loan. It affects borrowers whose loans are connected to the benchmarks that have been revised by the bank. Customers with other types of interest-rate arrangements may not see the same immediate change.
Illustrative calculations cited in the report show how the increase could affect monthly repayments. If the interest rate rises from 8% to 8.25% and the remaining tenure is 20 years, a borrower with an outstanding loan of Rs 50 lakh would see the monthly EMI increase by about Rs 781 if the tenure remains unchanged. For an outstanding loan of Rs 1 crore, the monthly increase would be about Rs 1,563.
These calculations apply to the stated loan amounts, interest rates and 20-year remaining tenure. The actual change for an individual borrower may differ because home loan EMIs are determined by the outstanding balance, the applicable benchmark spread, the remaining repayment period and the lender’s calculation method.
Borrowers generally face two practical choices when rates rise: retain the existing EMI and extend the repayment period, subject to the bank’s terms, or increase the EMI while keeping the remaining tenure unchanged. Keeping the EMI stable can reduce immediate pressure on monthly cash flow, but extending the tenure may result in interest being paid for a longer period.
Increasing the EMI can help limit the additional interest cost when a borrower has sufficient monthly income and financial flexibility. Before choosing an option, borrowers should review their income, essential expenses, emergency savings and other loan commitments. SBI customers facing repayment pressure can discuss the available alternatives with the bank.
The revised benchmark-linked rates are already effective, and the next step for affected borrowers is to check their updated loan terms and repayment schedule with SBI.
