Good news for those planning to buy homes: SBI makes home loans cheaper

Cuts rate on homes loans above Rs 75 lakh by 10 bps from June 15; new rate 8.55% for women, 8.6% for others

Country’s largest lender State Bank of India has decided to reduce interest rates on home loans above Rs 75 lakh by 10 basis points to 8.6 per cent per annum. 

Revised rates would be effective from June 15. For salaried women borrowers, the rates have been changed to 8.55 per cent per annum

Decision to cut rates comes close on the heels of the Reserve Bank of India asking banks to reduce risk weight, besides urging lenders to decrease the capital set aside for home loans from 75 per cent to 50 per cent. Measures were aimed at supporting demand for hoome laons.  

Taking cue from the recent RBI directive, the State Bank of India decided to extend benefits to its customers by cutting its term deposit rates by up to 50 basis points for various maturities, ranging from medium and long-term deposits, for laon amounts up to Rs 1 crore.   

This was the second reduction in interest rates undertaken by the lender in the last two months. Earlier, SBI had reduced its interest rates by 25bps on April 9, 2017.  

SBI’s home loan portfolio rose by 16.82 per cent to Rs 2,22,605 crore during 2016-17. Share of home loans above Rs 75 lakh stood at 15 per cent.