SBI hikes minimum interest rate on home loans by 25 bps to 6.95%

In a clear signal that soft interest cycle for home loan borrowers is over, State Bank of India (SBI) has hiked the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent with effect from April 1, 2021.

This hike in minimum home loan rate by SBI will prompt other lenders to follow suit.

SBI had lowered the minimum interest rate from 6.80 per cent to 6.70 per cent on March 1, 2021 for a limited period up to March 31, 2021.

The Bank will also charge a consolidated processing fee. This will be 0.40 per cent of the loan amount plus applicable GST, subject to a minimum of ₹10,000 and maximum of ₹30,000 plus GST.

However, for builder tie-up projects where individual TIR (title investigation report) and valuation is not required, the processingaforementioned fee will be 0.40 per cent of loan amount subject to maximum recovery of ₹10,000 plus applicable tax. And, if TIR and Valuation is required, then normal charge will be applicable., as per the Bank’s website.

The lender had waived home loan processing fees till March 31, 2021.

In February, the Bank said it expects to double its home loan portfolio in the next five years to Rs ₹10 lakh crore on the back of higher economic growth and growing preference of the new generation to buy a home early.

SBI took about 10 years to grow its home loan portfolio from ₹89,000 crore in FY2011 to touch the ₹5 lakh crore mark, Chairman Dinesh Kumar Khara told media in February 2021.

SBI took about 10 years to grow its home loan portfolio from ₹89,000 crore in FY2011 to touch the ₹5 lakh crore mark, Chairman Dinesh Kumar Khara told media at a press meet in February 2021.