Will home loans get costlier? SBI hikes lending rates by 10 bps: Check current home loan interest rates

Home loans can potentially get costlier since SBI's three-year tenor MCLR is now 9.10%, from 9% earlier and overnight MCLR is now 8.20%, from 8.10 previously.

State Bank of India (SBI), India’s largest state-run bank, has recently increased interest rates on loans by 10 basis points, effective from Thursday, August 15, 2024.

All types of loans, including home loans can potentially get costlier since the MCLR has now been hiked. (Pradeep Gaur/Mint)

SBI's Marginal Cost of Funds Based Lending Rate (MCLR) for a three-year tenor is now 9.10%, compared to 9% earlier. Overnight MCLR is now 8.20%, compared to 8.10 previously. The bank had raised its MCLR previously by up to 30 basis points in some tenors since June 2024.

What is the impact of the increased interest rates on SBI home loans?

All types of loans, including home loans can potentially get costlier since the MCLR has now been hiked.

The current interest rates for SBI home loans are as follows:

SBI home loan rates (Source: SBI website)

Why did banks hike their MCLR and how is it related to home loans?

The Reserve of India (RBI) had flagged concerns due to banks and NBFCs not following prudential norms when it comes to top-up home loans. This was combined with the fact that there was a high growth in personal loans, especially in home equity or top-up loans in the housing segment.

As a result, other PSU banks including Bank of Baroda, Canara Bank, and UCO Bank had hiked their MCLR. SBI has joined the bandwagon now.