SBI cuts home loan interest rate by up to 0.25%

State Bank of India has cut its home loan rates by 25 basis points.

This move follows a 15 basis points cut in its minimum lending rate (or the base rate) last week to 9.85 per cent.

The new home loan rates, which are effective from Monday are: for women borrower : 9.85 per cent (10.10 per cent earlier), and for others: 9.90 per cent (10.15 per cent).

The above rates will be applicable for all new home loans sanctioned on or after April 13, 2015.

Interest rate for existing floating rate home loan borrowers has also been reduced to the extent of reduction in the bank's base rate, that is, 15 bps with effect from April 10, 2015.

SBI cut its base rate to 9.85 per cent from 10 per cent with effect from April 10.

The revised EMI per lakh for a loan tenure of 30 years will be Rs 867 (for women) and Rs 871 (for others) as against Rs 885 and Rs 889 respectively, prior to reduction in Base Rate.

HDFC, country’s leading standalone housing finance firm, had reduced its home loan rate by 20 bps to 9.9 per cent last Friday.

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 the 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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