Hydrothermal processing can deposit crystalline ferroelectric films at low temperatures of less than 150°C to achieve permittivities above 100. Such a process, hence, can be attractive in integrating thin film capacitors in organic, silicon or flex substrates. However, their poor insulation strength leading to high leakage current can prevent their wide acceptance. Lattice defects such as hydroxyl groups are attributed to their high leakage currents and lower Breakdown Voltages (BDVs). With appropriate thermal treatments, majority of the OH groups can be removed, leading to improved insulation characteristics. The leakage current behavior of as-synthesized and post-baked hydrothermal thin films are analyzed with various conduction models. The room temperature I-V characteristics are attributed to a combination of ionic and Space-Charge-Limited (SCLC) conduction models for films baked at 160°C while higher baking temperatures of 350°C agree well with Poole-Frenkel type conduction, with an activation energy of 0.57 eV for the defects. The defects, which are presumably OH groups or oxygen vacancies embedded in the barium titanate lattice, act as shallow traps and the trapping and detrapping results in easier conduction. A brief perspective is provided on the suitability of such a hydrothermal thin film capacitor approach for power supply applications.