State Bank of India’s customers may find servicing new home loans relatively easier on their pocket, with the equated monthly instalment (EMI) coming down by ₹11 per ₹1 lakh loan, following the bank paring its benchmark interest rate by 0.15 percentage points.
India’s largest bank on Wednesday said it has cut interest rates by 0.15 percentage points for home loans up to ₹75 lakh with effect from November 1 as part of its limited two-month festival offer.
This move could prompt other banks to follow suit in order to protect their market share.
The cut in home loan rate follows the bank paring its one-year marginal cost of funds-based lending rate (MCLR) by 0.15 percentage points to 8.90 per cent with effect from November 1 from 9.05 per cent earlier.
The revised rate of interest on home loans for women and other borrowers is now 9.10 per cent (9.25 per cent earlier) and 9.15 per cent (9.30 per cent), respectively.
The EMI for women and other borrowers will now be ₹11 cheaper per ₹1 lakh of loan at ₹812 and ₹816, respectively.
Saving on EMI The bank, in a statement, said that for a home loan of ₹50 lakh, the reduction in interest rate by 0.15 percentage points will help a home buyer save ₹542 per month and approximately ₹2 lakh during the loan tenure of 30 years.
The value of the savings on EMI of ₹542 per month, if invested in a recurring deposit, will be approximately ₹6 lakh at the end of the loan tenure, it added.
Besides the reduced interest rate, the bank said customers can also avail processing fee waiver on SBI-approved projects; online applications (through www.onlineapply.sbi.co.in ); balance transfer of home loans; and for government employees under the SBI Privilege and SBI Shaurya schemes.
This interest rate reduction and processing fee waiver are part of a limited period festival bonanza, valid from November 1 to December 31, 2016.