SBI: Cuts Housing Loan Rates..

State Bank of India (SBI) has reduced interest rates on housing loans by 0.05 to 0.15%, a move which will mainly benefit big-ticket home loan borrowers.The bank will charge a woman borrower 10.10%, and other borrowers, 10.15%, irrespective of the loan amount.

Earlier, for a woman borrower, the bank used to charge 10.10% on housing loans up to Rs. 75 lakh, and 10.25% for loans above Rs. 75 lakh.

Other home loan borrowers were charged 0.5% more for the same slab. The SBI said that the revised rates would kick in from August 26, 2014.

The reduction in rate will boost big-ticket housing loans & reduce the interest burden for women borrowers.

A senior SBI official said the share of bank's housing loans in metro cities is 44% & the reduced rates will increase sales in metros such as Mumbai & Bangalore where property prices are already high, starting from Rs. 70 lakh.

Second, the cost of operating a high-value account is much less and the chances of defaults too are low in this portfolio, he added.

A SBI official, who did not wish to be identified, said that the move to reduce rate is also to incentivise women to own property. The SBI launched a special scheme for women housing loan borrowers in December 2013 wherein it charged them 0.05% lower rate of interest than others. However, this comes with the condition that a woman borrower has to be the first owner of the property.

One-fifth of the new home loans disbursed since the launch of the special scheme in December 2013 are to women borrowers. On an average, SBI provides Rs. 35,000 to Rs. 40,000 crore housing loans a year.

As of July this year (2014), the bank's loan book stood at Rs. 1.46 lakh crore. The decision to cut rates will force rival home loan providers (like ICICI Bank and HDFC) to revisit their housing loan structure, officials from the banking circles said.


Share:

No comments:

Post a Comment

Popular Posts

Blog Archive

Recent Posts

Featured Post

BSE releases list of 25 stocks available for T+0 settlement starting March 28, 2024

BSE releases list of 25 stocks available for T+0 settlement starting March 28, 2024