The State Bank of India (SBI) has decided to offer home loans to prospective home loan customers, including those opting for balance transfer, at interest rates starting from 6.70 per cent against 6.80 per cent earlier, waive processing fees and occupation-linked interest premium, as part of its festive offer.

India’s largest bank, in a statement, said it is offering credit score linked home loans at 6.70 per cent, irrespective of the loan amount. Earlier a borrower availing a loan greater than ₹75 lakh, had to pay an interest rate of 7.15 per cent.

“With the introduction of the festive offers, a borrower can now avail home loan for any amount at a rate as low as 6.70 per cent.

“The offer results in a saving of 45 basis points (bps) which translates into a huge interest saving of more than ₹8 lakh for a ₹75 lakh loan with a 30 year tenure,” the bank said.

Salaried vs non-salaried

Further, SBI has removed the distinction between a salaried and a non-salaried borrower.

“Now, there is no occupation-linked interest premium being charged to prospective home loan borrowers. This would lead to a further interest saving of 15 bps to non-salaried borrowers,” SBI said.

Earlier, the rate of interest applicable for a non-salaried borrower was 15 bps higher than the interest rate applicable to a salaried borrower.

This move by SBI comes in the backdrop of Kotak Mahindra Bank’s September 9th announcement that it has reduced its home loan interest rates by 15 bps from 6.65 per cent to 6.50 per cent. The private sector bank said its special rate is a limited period festive season offer beginning 10th September and ending 8th November 2021.

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SBI has also waived processing fees and offers interest concession based on the credit score of the borrower.

Challa Sreenivasulu Setty, Managing Director (Retail & Digital Banking), SBI said, “Generally, concessional interest rates are applicable for a loan up to a certain limit and are also linked to the profession of the borrower.

“This time, we have made the offers more inclusive and the offers are available to all segments of borrowers irrespective of the loan amount and the profession of the borrower.”

Setty observed that zero processing fees and concessional interest rates in the festive season will make homeownership more affordable.

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