The cut takes SBI home loan rates on a par with closest competitor Housing Development Finance Corporation, which recently cut its retail prime lending rate by 20 bps, thus taking its cheapest loan rate to 9.9%
India’s largest lender State Bank of India (SBI) on Sunday cut interest rates on home loans of new borrowers by 25 basis points (bps) to 9.9%, the bank said in a statement, adding that women borrowers would get home loans at the base rate of 9.85%.
This makes the revised equated monthly installment (EMI) per Rs 1 lakh for a loan tenure of 30 years to Rs 867 as against Rs 885 earlier for women borrowers, and Rs 871 as against Rs 889 earlier for other borrowers.
These rates will be applicable for all new home loans sanctioned on or after April 13, SBI said.
This follows a 15 bps reduction in base rate to 9.85% earlier last week after the Reserve Bank of India (RBI) urged banks for transmission of policy rates.
Thanks to prodding by the RBI, SBI, HDFC Bank, ICICI Bank, Axis Bank lowered base rates by 15-25 basis points (bps) to 9.75-9.95% last week.
Sunday’s cut takes SBI home loans rates on a par with its closest competitor housing development finance corporation (HDFC) which recently cut its retail prime lending rate (RPLR) by 20 bps, thus taking its cheapest loan rate to 9.9%.
SBI had last revised its home loan rates in August last year when it cut rates to 10.15% for all loan brackets, and for women borrowers the interest rate for all home loans was put at 10.1%.
Prior to that, SBI charged 10.15% for loans up to Rs 75 lakh and 10.3% for loans above Rs 75 lakh. SBI’s home loan portfolio on December 31, 2014 stood at Rs 1.52 lakh crore, up 12.6% from Rs 1.35 lakh crore a year ago and home loans constituted 12% of the bank’s loan book in Q3 FY15.
At present, the base rate – lowest lending rate – of all banks stands in the range of 9.75-11%. The base rate of ICICI Bank is at 9.75%; SBI and HDFC Bank is at 9.85%; Axis Bank is at 9.95% and United Bank and Union Bank stand at 10%. For lenders like IDBI Bank and Punjab National Bank (PNB), it is at 10.25% and for Federal Bank the base rate stands at 10.2%.