Home loan alert: SBI, PNB and 4 other banks revise lending rates — how borrowers may be affected

The Reserve Bank of India (RBI) recently hiked its benchmark repo rate by 25 basis points to 5.50% on 7 October 2026. This announcement was made at the culmination of the three-day Monetary Policy Committee (MPC) meeting.

Subsequently, several banks have also increased their repo-linked lending rates, thus making loans linked to these benchmarks potentially more expensive. Prominent lending institutions such as State Bank of India (SBI), Punjab National Bank (PNB), Bank of India, Indian Bank, Bank of Baroda and Canara Bank have revised their respective lending benchmarks in October 2026.

Due to these developments, existing borrowers and those planning to take fresh home loans should diligently check the latest rates, as changes in lending benchmarks can impact borrowing costs and monthly instalments. Having clarity on these aspects is essential in order to make meaningful and beneficial borrowing decisions.

Here are the revised rates announced by six major banks across the country:

Therefore, an increase in a lending benchmark can raise the interest rate on loans linked to it. This also depends on the lending institution's applicable spread and loan terms. Existing borrowers might witness higher EMIs or a longer repayment period, depending on how their banking institution adjusts the loan. New borrowers and fresh loan applicants may also face higher borrowing costs due to these changes.

Still, do keep in mind that the revised benchmark is not necessarily the final interest rate the borrower pays. That is why it is prudent to carefully review and compare the effective interest rate, processing charges and repayment terms across lending institutions before taking a loan or planning to refinance an existing loan.

If you are an existing borrower, you should check with your lending institution to confirm when the revised rate will apply and how it will affect your existing loan.

Shivam writes on personal finance, equity markets, and mutual funds. He has previously contributed to several leading publications, including Moneycontrol. He can be reached at shivam.shukla@htdigital.in

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