SBI Home Loan Rate Cut – Get Your Loan at 8.35% Now

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State Bank of India (SBI) has announced the rate cut on home loans by 50 bps. The new rate will be applicable from today onwards that is from 9th May 2017. SBI is India’s largest lender has become the first bank to cut home loan rates two times in the year 2017. The bank has cut interest rates on home loans to 8.35% (p.a.) from 8.60% (p.a.) for women borrowers.

What has changed now?

Under this new government scheme, loans under ₹30 lakh qualify for affordable housing. For loans ranging from ₹30 lakh to ₹75 lakh, the bank has cut rates by 10 basis points. All the new women customers can now enjoy the home loan rate of up to ₹30 lakhs at 25 basis points less after an effective 50 basis point cut that led other lenders to cut home loan rates. The new rate reduction of 0.25 (rpt) 0.25 per cent for women is for salaried borrowers only whereas the non-salaried women borrowers will get 20 bps cut. For male borrowers, the rate cut is for a limited period only valid till July 31 and the reduction for the salaried is 20 bps to 8.40% and for non-salaried 15 bps.

Post this rate cut at SBI, the borrowers can surely see a major difference between the old and new EMI. There is a going to be a clear cut saving of ₹439 per month on EMI and ₹79,073.

SBI managing director for national banking Rajnish Kumar told PTI:

This is giant leap to give a flip to the affordable housing segment keeping the Prime Minister’s vision of providing ‘housing for all’ by 2022

He also added that the lender now offers the lowest rates in the industry ,alongwith Bank of Baroda, which is 8.35%. With a home loan book of ₹2.23 trillion, SBI leads the segment with 25-26 per cent market share, Kumar said further. However, he is of the view that the new offer may not push up its market share significantly as 45 per cent of its ₹2.23 trillion home loan book is under ₹30 lakh bracket.

In the two years to March 2017, credit to the industry has grown 0.76%. In comparison, personal loans grew 39% and mortgages rose 36%, data from the Reserve Bank of India shows.

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“Banks will look at the housing space extensively since corporate lending has slowed down,” said Siddharth Purohit, senior banking analyst, Angel Broking Ltd. “There is enough space for both non-banking financial companies (NBFCs) and banks to grow. Interest subsidy scheme will be the motivating factor for new home buyers.”

A statement by SBI announcing Monday’s rate cut also said that eligible home loan customers can avail of an interest subsidy of ₹2.67 lakh under the Pradhan Mantri Awas Yojana scheme. It also said that it had come out with special offerings for construction finance to builders of affordable homes.

Recently, SBI has merged with its five associate banks- State Bank of Mysore (SBM), State Bank of Hyderabad (SBH), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT) and State Bank of Patiala (SBP) after which it has become the 45th most powerful bank in the world.