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SBI Repo Linked Lending Rate Home Loan

Highlights

  • SBI Launches Repo Linked Lending Rate for Home Loans
  • The interest rate would change as per the change in RBI repo rate

The country’s largest lender i.e. State Bank of India (SBI) has launched a new home loan product linked to Repo Rate, which is the rate at which the Reserve Bank of India (RBI) lends to commercial banks such as SBI. Currently, the repo rate stands at 5.75%. However, SBI will add a few more above the repo rate to calculate Repo Linked Lending Rate (RLLR). The RLLR, as on July 1, 2019, stands at 8.00%. The bank will further add a mark-up for loans up to ₹75 lakh and above ₹75 lakh. Let’s get into the details pertaining to SBI RLLR Home Loan.

An Overview on SBI RLLR Interest Rate

You can check out the interest rates of this term loan in the table below.

Loan AmountRG 1,2,3RG 4,5,6
Up to ₹75 LakhRLLR + 0.40% = 8.40%RLLR + 0.55% = 8.55%
Above ₹75 LakhRLLR + 0.95% = 8.95%RLLR + 1.10% = 9.10%

Important Notes to Keep in Mind

  • The rate linked to RLLR can go up and down in line with the movement of RLLR as per the bank’s policy. In case there is a change in the policy, RLLR will be changed from the first day of the following month.
  • The spread fixed at the time of first disbursement in home loan will remain fixed throughout the course of a loan.
  • A minimum 3% of the principal loan amount needs to be serviced through Equated Monthly Installments (EMIs) every year, subject to the liquidation of loan before the borrower becomes 75 years old. The interest charged on the loan account will be serviced on a monthly basis.
  • The scheme, however, does not allow takeover of home loans from other banks/housing finance companies (HFCs)/FIs till further instructions. In addition, the scheme is not available for extending home loans for the purchase of plot of land.
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How Does SBI Assess the Loan Eligibility for RLLR Home Loans?

SBI assesses the loan eligibility based on the lowest of the value arrived from the following criteria.

  • Maximum permissible Loan to Value (LTV) as per regular home loan.
  • Based on cash flows (Net Annual Income) and Debt Service Coverage Ratio (DSCR), subject to a minimum DSCR of 1.25 including proposed home loan EMIs, and the loan amount applied for

Is There Any Minimum Income Criteria for SBI RLLR Home Loan?

Yes, it is. You need to earn a minimum gross annual income of ₹6 lakh to be granted an RLLR linked home loan from SBI.

Loan Tenure & Moratorium Period

RLLR home loans can be given for a maximum of 33 years. The repayment would start from one month from the date of loan disbursement if the loan is availed to buy a ready to move in property, already built flat/unit. For loans taken for under construction projects, you can get a maximum moratorium period of up to 24 months over and above the maximum loan tenure of 33 years. However, the maximum loan tenure must not be more than 35 years, including the moratorium period, in such cases. Interest accrued on the moratorium period will be recovered from the borrowers on a monthly basis.