Home loans are getting cheaper! SBI leads way

Mumbai: State Bank of India has slashed home loan rates by 10 to 25 basis points, a move that will force other lenders to similarly lower rates. SBI has refrained from cutting its marginal cost of lending rate (MCLR), which stands at 8% for one year. SBI has the largest share in the home loan market.
The bank will now charge salaried borrowers 8.35% on home loans up to Rs 30 lakh as against 8.60%. For loans above Rs 30 lakh, the bank will charge 8.50%, down 10 bps. It will continue to charge 8.60% on loans above Rs 75 lakh.

 

The rate cut will help only new borrowers since existing borrowers are locked into one-year fixed rate on interest as per the rule of arriving at lending rates.

The reduction in rates comes within a month of five associate banks merging with the parent bank. Recently, SBI cut deposit rates by 50 basis points across different maturities. SBI also said an eligible home loan customer can also avail of an interest subsidy of `2.67 lakh under the Pradhan Mantri Awas Yojana scheme. SBI said to supplement the national affordable housing push, it has also come out with special offerings for construction finance to the builders for affordable housing projects.

“This will give a dual push both for construction finance and also for construction finance and also for home finance for affordable homes,“ Rajnish Kumar, managing director, SBI said. “We have seen a steep hike in the home loan enquiries recently and reduction in rates will further help millions of home buyer's fulfill their dream of owning a home. Individuals can apply for home loans through multiple channels."

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