New Delhi: Matching its competitor HDFC Ltd, State Bank of India on Sunday announced a cut in home loan rate by up to 0.25 per cent, providing relief to new borrowers. The cut in interest rate on home loans, with effect from Monday, is higher than the reduction of 0.15 per cent in base rate that came into force on April 10.
The bank said in a statement that the home loan rate stood at 10.1 per cent for women borrowers prior to the reduction in base rate. It will now be 9.85 per cent. For other borrowers, the new rate is 9.9 per cent, down from 10.15 per cent before base rate cut. The rates will be applicable for all new home loans sanctioned on or after April 13, SBI said.
The SBI announcement comes two days after HDFC Ltd, the country's largest mortgage firm, reduced home loan rate by 0.2 per cent to 9.9 per cent for new as well as existing borrowers.
As of December, 2014, SBI had outstanding housing loan of Rs 1,52,905 crore as against Rs 1,35,129 crore at the end of third quarter of the previous fiscal registering a growth of 13.15 per cent.
HDFC Ltd had a loan book grew to Rs 2,19,951 crore at the end of last year as against 1,92,284 crore as at December 31, 2013. SBI said: "Interest rate on the bank's home loans was 10.10 per cent for Women under 'HER Ghar' and 10.15 per cent for others."
The bank reduced base rate to 9.85 per cent effective April 10 following loans linked to base rate including housing were reduced. "We have decided to cut the spread by an additional 0.10 per cent today for new borrowers," SBI chief general manager for real estate, habitat and housing development, J Lakshmi said.
Women borrowers should be sole applicants or first of the co-applicants and also the sole/ first co-owners of the property to avail of the benefit extended to them, it said. Interest Rate for SBI existing floating rate home loan borrowers has also been reduced to the extent of reduction in the bank's base rate to 9.85 per cent effective April 10.
The revised EMI per lakh for a loan tenure of 30 years will be Rs 867 (for women under HER Ghar) and Rs 871 (for others) as against Rs 885 and Rs 889 respectively, prior to reduction in base rate, it added.
Last week, many banks including State Bank of India, ICICI Bank, HDFC Bank and Axis Bank cut lending rate by up to 0.25 per cent after RBI Governor Raghuram Rajan's tough talk with bankers on the issue.
After cutting the policy rate twice this year, the central bank kept it unchanged at 7.5 per cent in its monetary policy on April 7. The Reserve Bank had blamed banks for not passing the benefits of two repo rate cuts to borrowers and termed as "nonsense" the lenders' claims that cost of fund was high. "The banks marginal cost of funding (has) fallen, the notion that it hasn't fallen, is nonsense; it has fallen" Rajan had said.
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