MUMBAI: The State Bank of India has announced a rate cut in home loans by 25 basis points – from 8.6 per cent to 8.35 per cent – the “lowest rate in the market”, according India’s biggest bank. The new rate will be effective on new home loans from May 9, 2017.
The effective interest rate for all customers will be 8.35 per cent for loans up to Rs. 30 lakh. The eligible borrowers can also an avail an interest subsidy of Rs. 2.67 lakh under the Pradhan Mantri Awas Yojana scheme, SBI said. Under the Pradhan Mantri Awas Yojana (Urban) for middle-income groups, home loan borrowers buying their first home are eligible for subsidy on interest repayments.
“The effective interest rate for all eligible salaried customers will be 8.35 per cent for loans up to Rs. 30 lakh. Over and above, an eligible home loan customer can also avail of an interest subsidy of Rs. 2.67 lakh under the Pradhan Mantri Awas Yojana scheme,” SBI said in a statement.
The rate cut will give a fillip to the affordable housing segment, said SBI, which claims to be the largest provider of home loans in India. The interest rates for customers availing a Home Loan above Rs. 30 lakh have also been reduced. An SBI official told that home loan rates above Rs. 30 lakh has been cut by 10 basis points to 8.5 per cent.
To supplement the affordable housing push, SBI 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 home finance for affordable homes,” SBI said.
Rajnish Kumar, managing director of National Banking Group at SBI, said, “We have seen a steep hike in the home loan enquiries recently and reduction in rates will further help millions of home buyers fulfill their dream of owning a home.”
SBI also recently cut its fixed deposit rates by up to 50 basis points for various maturities. The rates have been revised for medium and long term deposits and for amount below Rs. 1 crore.