SBI also announced a new semi-fixed interest rate mortgage product for loans up to Rs 30 lakh
A day after the reducing its benchmark marginal cost based lending rate (MCLR) by 0.90 per cent to 8 per cent, State Bank of India (SBI) on Monday announced home loan rates at 8.65 per cent per annum for loans upto Rs 75 lakh and 8.60 per cent per annum for women borrowers.
For loans above Rs 75 lakh, the interest rate would be 8.70 per cent per annum for male borrowers and 8.65 per cent per annum for women borrowers.
Earlier, the bank was charging an interest rate of 9.25 per cent on home loans for women borrowers and 9.30 per cent for others on loans upto Rs 75 lakh as part of the festival offer that ended on December 31, 2016.
That means the bank is charging a risk premium of 0.65 per cent on the
MCLR rate of 8 per cent for home loans upto Rs 75 lakh for male borrowers and a risk premium of 0.60 per cent for women borrowers.
SBI’s home loans since are benchmarked against the one-year MCLR as a result borrowers will see their rates getting reset every year.
Giving an illustration, Arudhati Bhattacharya chairman SBI said that a person can save Rs 2,333 per month on 30-year, Rs 50 lakh home loan at the revised rates of 8.6 per cent. Calculated on a yearly basis, the savings go up to Rs 27,996 and over the period of 30 years, the total savings go up to Rs 8.39 lakh, she said. If this amount saved on lower EMIs is invested in a recurring deposit at 6.5 per cent over a 30-year period, it will fetch Rs 25.80 lakh, she explained.
SBI also announced a new semi-fixed interest rate mortgage product for loans up to Rs 30 lakh at 8.50 per cent which would have a fixed rate for the first two years after which it would be linked to floating rate. For male borrowers, the fixed interest rate would be 8.55 per cent for first two years after which it would be linked to floating rate.
The Bank said that a woman should be the sole applicant or one of the co-applicants for home loan and also the sole owner or one of the co-owners of the property proposed to be financed by the Bank. Loans upto Rs 30 lakh will be available with both Fixed and Floating Rate option.
Bhattacharya at the press briefing said that the rate cuts were intended to "jump start" credit growth and could raise it by 100-200 bps in the year ending in March. SBI now expects credit growth for 2016/17 fiscal year to be 8-9 percent, Bhattacharya said, still lower than the lender's previous formal guidance of 10-12 percent growth.
Following SBI, several other lenders including Punjab National Bank, ICICI Bank, Union Bank of India, IDBI Bank, Kotak Mahindra Bank and Dena Bank also cut their lending rates by 45-90 basis points across tenures.
For loans above Rs 75 lakh, the interest rate would be 8.70 per cent per annum for male borrowers and 8.65 per cent per annum for women borrowers.
Earlier, the bank was charging an interest rate of 9.25 per cent on home loans for women borrowers and 9.30 per cent for others on loans upto Rs 75 lakh as part of the festival offer that ended on December 31, 2016.
That means the bank is charging a risk premium of 0.65 per cent on the
MCLR rate of 8 per cent for home loans upto Rs 75 lakh for male borrowers and a risk premium of 0.60 per cent for women borrowers.
SBI’s home loans since are benchmarked against the one-year MCLR as a result borrowers will see their rates getting reset every year.
Giving an illustration, Arudhati Bhattacharya chairman SBI said that a person can save Rs 2,333 per month on 30-year, Rs 50 lakh home loan at the revised rates of 8.6 per cent. Calculated on a yearly basis, the savings go up to Rs 27,996 and over the period of 30 years, the total savings go up to Rs 8.39 lakh, she said. If this amount saved on lower EMIs is invested in a recurring deposit at 6.5 per cent over a 30-year period, it will fetch Rs 25.80 lakh, she explained.
SBI also announced a new semi-fixed interest rate mortgage product for loans up to Rs 30 lakh at 8.50 per cent which would have a fixed rate for the first two years after which it would be linked to floating rate. For male borrowers, the fixed interest rate would be 8.55 per cent for first two years after which it would be linked to floating rate.
The Bank said that a woman should be the sole applicant or one of the co-applicants for home loan and also the sole owner or one of the co-owners of the property proposed to be financed by the Bank. Loans upto Rs 30 lakh will be available with both Fixed and Floating Rate option.
Bhattacharya at the press briefing said that the rate cuts were intended to "jump start" credit growth and could raise it by 100-200 bps in the year ending in March. SBI now expects credit growth for 2016/17 fiscal year to be 8-9 percent, Bhattacharya said, still lower than the lender's previous formal guidance of 10-12 percent growth.
Following SBI, several other lenders including Punjab National Bank, ICICI Bank, Union Bank of India, IDBI Bank, Kotak Mahindra Bank and Dena Bank also cut their lending rates by 45-90 basis points across tenures.
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