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Home loans cheaper than SBI, HDFC: 6 Govt banks offering housing loans at 8.1% to 8.15% in February 2025

Upstox
By Upstox News Desk

2 min read | Updated on February 26, 2025, 14:34 IST

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SUMMARY

While SBI's home loan interest rate is cheaper than the housing loans offered by several lenders, it is not the cheapest. Data on various lenders' websites show at least six banks are currently offering home loans that are cheaper than SBI.

home loan interest rate cut

Final home loan rates offered by lenders vary from customer to customer. | Image: Shutterstock

The Reserve Bank of India (RBI) recently reduced the repo rate by 25 basis points to 6.25%. It is expected this move will ease the burden on home loan borrowers.

Retail floating-rate home loans sanctioned after October 1, 2019, are linked to the repo rate. Therefore, when the RBI cuts the repo rate, banks have to pass on the rate-cut benefit to borrowers.
Recently, the State Bank of India became one of the first major banks to pass on the repo rate cut benefit to its home loan customers. SBI reduced its floating rate home loan interest rates by 0.25%. Now it is offering home loans starting at 8.25% interest, which is cheaper than the starting rates of many private sector lenders such as HDFC and ICICI Bank.

While SBI's home loan interest rate is cheaper than the housing loans offered by several lenders, it is not the cheapest. Data on various lenders' websites show at least six banks are offering home loans that are cheaper than SBI in February 2025.

Union Bank of India: This public sector bank is offering home loans starting at an 8.1% annual interest rate. A home loan of ₹50 lakh for 20 years will result in a monthly EMI of ₹42,133.
Central Bank of India: This bank also offers home loans starting at an 8.1% annual interest rate.
Bank of Baroda, Punjab National Bank, Canara Bank, and Indian Bank: These public sector banks are offering home loans starting at 8.15% interest rate. A housing loan of ₹50 lakh for 20 years will result in a monthly EMI of ₹42,289.

In contrast to the above-mentioned public sector lenders, private sector home loan providers such as HDFC Bank, Axis Bank, Kotak Mahindra Bank ,and ICICI Bank are offering home loans starting at an 8.75% interest rate. A housing loan of ₹50 lakh for 20 years at this rate will result in a monthly EMI of ₹44,185.

Please note that the final home loan rates offered by lenders vary from customer to customer, depending on their credit scores. It is expected that all lenders will pass on the repo rate cut benefit to customers by the next interest reset cycle.

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About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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