State Bank of India (SBI) on Thursday has reduced the home loan interest rates to 6.7 per cent for any loan amount. This is the first time a bank is providing home loans at a uniform rate, the lender mentioned. The latest offer by country’s largest lender aims to encourage the home buyers ahead of the festive season.
Explaining how this first-of-its-kind initiative will benefit the home buyers, SBI said that a buyer needs to pay an interest of 7.15 per cent for availing a home loan of Rs 75 lakh. With the introduction of the festive offers, the home loan will be available at an interest rate of 6.7 per cent. “The offer results in a saving of 45 bps which translates to a huge interest saving of more than Rs 8 lakh, for a Rs 75 lac loan with a 30 year tenure,” SBI said.
Earlier the home loan interest rate was different for salaried and non-salaried homebuyers. Non-salaried borrowers had to pay higher interest rates that their salaried counterparts. “Now, there is no occupation-linked interest premium being charged to prospective home loan borrowers. This would lead to a further interest saving of 15 bps to non-salaried borrowers,” the bank clarified.
“Generally, the concessional interest rates are applicable for a loan up to a certain limit and are also linked to the profession of the borrower. This time, we have made the offers more inclusive and the offers are available to all segments of borrowers irrespective of the loan amount and the profession of the borrower,” said CS Setty, Managing Director (Retail & Digital Banking), SBI.
On how it will benefit the home loan borrowers, Anuj Puri, chairman, ANAROCK Group said, “This is an extremely competitive move which virtually negates all the previous limitations which applied to special home loan interest rates. Instead of focusing on just budget housing, this new interest rate is genuinely democratic as buyers from any budget bandwidth will benefit.”
To encourage homebuyers ahead of the festive season, the lender also announced to waive off the processing fee. There will also be concession on home loan interest rates based on the credit score of the borrower, the bank mentioned. The same interest rate will be applicable for those who are planning to transfer their home loan from other banks to State Bank of India.
“This lending rate will also not restrict which cities will benefit from it – in previous concessional rates limited to budget housing, only tier 2 and tier 3 cities could really benefit. With this democratized interest rate, SBI also addresses the huge housing demand in the metros. This move is aptly timed, coinciding with the beginning of the festive season,” Puri added.
Waiving of processing fees and occupation-linked interest premium are added levels of savings. Cumulatively, this package is the most compellingly attractive offering ever extended by a housing loan lender,” he further mentioned.
“We believe zero processing fees and concessional interest rates in the festive season will make homeownership more affordable. Our country has shown tremendous resilience during the pandemic. Being the Banker to every Indian, we, are committed to doing our bit in reviving the economy by enabling housing for all,” Shetty concluded.
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