In the coming days, home loan borrowers may have to pay higher interest. The State Bank of India (SBI), the country’s largest government bank, has increased home loan rates by 25 basis points for new borrowers.
This increase will especially affect customers whose loan depends on their credit score. Along with SBI, Union Bank of India has also raised its home loan rates.
New SBI Home Loan Rates
Earlier in July, SBI’s home loan rates were between 7.5% and 8.45%. After the recent hike, the rates have now moved up to 7.5% – 8.70%.
According to a report in The Economic Times, this revision will apply only to new borrowers. Existing home loan customers will not be affected by this increase.
Union Bank and Private Bank Loan Rates
Union Bank of India has also revised its interest rates from 7.35% to 7.45%. However, neither SBI nor Union Bank has officially issued a statement about these changes.
When compared with private banks, the rates are slightly different:
HDFC Bank: 7.90%
ICICI Bank: 8%
Axis Bank: 8.35%
Growth in Home Loan Portfolios
Public sector banks are showing strong growth in the home loan segment.
HDFC Bank: Home loan portfolio grew by 7% (year-on-year) in the first quarter.
ICICI Bank: Growth of 10.30%.
SBI: Home loan portfolio increased by 14%.
Bank of Baroda: Highest growth among these, at 18%.
This shows that while private banks are also growing, government banks are performing better in the home loan market.