Has SBI lowered its home loan lending rates again?

The State Bank of India (SBI), the country’s largest public sector lender, has kept its key lending rates unchanged for May 2025, maintaining stability across both its Marginal Cost of Funds Based Lending Rate (MCLR) and external benchmark-linked rates such as Repo Linked Lending Rate (RLLR). This pause in the home loan and other loan interest rates has come after a 0.25% rate cut in April 2025. The rate cut in loan interest rate was implemented after the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points at its April monetary policy meeting 2025.

In April 2025, following the RBI’s 25-basis-point cut in the repo rate, SBI reduced its key lending rates for external benchmark-linked loans by up to 0.25%, aligning with the central bank’s monetary easing measures.

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Latest SBI External Benchmark Rate (EBR) for home loans, car loans, other loans
With effect from April 15, 2025, the External Benchmark Rate (EBR) of SBI is 8.65%. The EBR is the rate at which banks determine the interest rates for various floating rate loans, including home loans.
The EBR made up of two parts:
RBI Repo Rate: 6.00%
Spread (fixed by the bank): 2.65%
Final EBR = Repo Rate + Spread = 6.00% + 2.65% = 8.65%

Latest SBI home loan rates for borrowers
The External Benchmark Rate (EBLR) of SBI is linked to the RBI’s Repo Rate, with an added Credit Risk Premium (CRP) and Business Strategy Premium (BSP) based on the customer’s credit profile and loan product. The latest EBLR 8.65% with effect from April 15, 2025. So, the applicable home loan interest rate for borrower is Repo rate + Spread (Credit Risk Premium + Business Strategy Premium) which is 6% + 2.65% = 8.65%.

Latest SBI RLLR for home loan borrowers
The RLLR is also tied to the RBI Repo Rate with an additional Credit Risk Premium (CRP). The base RLLR is 8.25% which includes credit risk premium. This rate is effective from April 15, 2025. The credit risk premium is 2.25% over and above repo rate of 6%.

Latest SBI MCLR in May 2025
SBI's Marginal Cost of Funds Based Lending Rate (MCLR) remains unchanged in May 2025. The overnight and one-month MCLR are both at 8.20%, while the three-month rate is 8.55% and the six-month rate is 8.90%. The one-year MCLR is 9.00%, with the two-year and three-year rates at 9.05% and 9.10% respectively.

Source: SBI website

What is MCLR?
The MCLR is a benchmark rate used by banks to determine interest rates on various floating-rate loans, including home loans, personal loans, and auto loans. A decrease in MCLR translates to a potential drop in equated monthly installments (EMIs) of loans or a shorter loan tenure, benefiting borrowers in the long term. However, banks have moved from MCLR based regime to external benchmark regime from October 1, 2019. Hence, most banks are not issuing loans linked to MCLR based regime.

SBI home loan interest rates
SBI home loan interest rate varies from 8% to 8.95% based on the CIBIL score of the loan borrower. SBI Home loan Maxgain OD interest rate varies between 8.25% and 9.15%. For a top up loan, the interest rate varies between 8.30% and 10.80%. These rates are effective from April 15, 2025.