SBI reduced its home loan rates

India’s largest public bank, State Bank of India on Tuesday revised interest rates on home loans. Now SBI will offer uniform interest rate on home loans from effective August 26. SBI has cut interest rate by 5-15 bps on home loans.

For the home loans up to Rs 75 lakh, the interest rate will be 10 basis points above the base rate and for home loans of above Rs 75 lakh the interest rate will be15 bps above the base rate.

Earlier, on December 20, 2013 the rate of interest on SBI home loans were reduced with a separate interest rate structure that was also rolled-out for woman borrowers 10.25 per cent ((for loans above Rs 75 lakh) and 10.10 per cent (for loans up to Rs 75 lakh) too, a senior official with SBI said.

Mr. G S Sandhu, finance secretary said, the central government is planning for new interest subvention scheme, to encourage affordable housing, which will meet part of the buyer’s home loan burden. He said that according to scheme, there would be interest subvention up to 5% for loans up to Rs 5 lakh, while at present the interest subvention is available only on loans up to Rs 1 lakh. Interest subvention refers the subsidy that government provides the borrower, which makes the discount given by the lender.

Sandhu said that a blueprint on affordable housing plan is being prepared and this time the government is clear because it wants time-bound results. For affordable housing the new government had big plans and vision. The more burdens falls on public sector banks and real estate investment trusts could be a game-changer for the sector.

Senior executive with one of public sector bank said, increasing the loan limit to Rs 5 lakh will immensely increase the utility of these loans because this will enable the underprivileged to take benefit of low-cost housing schemes, which will be undertaken by state governments.

SBI officials said, it has now been decided to offer uniform interest rate on home loans, irrespective of the loan amount effective from August 26, 2014.