SBI Home Loans Get Cheaper From Today: 7 Points You Should Know

The State Bank of India on 9 April, re-priced home loans up to Rs 30 lakh by 10 basis points.

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The nation's largest lender State Bank on Tuesday, 9 April, re-priced home loans up to Rs 30 lakh by 10 basis points. Accordingly, interest rate on housing loans of such ticket size will now be in the range of 8.60-8.90 percent, down from 8.70-9 percent.

After repeated nudging by the Reserve Bank, the bank also lowered the lending rates by a nominal 5 basis points across all tenors, effective from Wednesday, 10 April.

Here is what you should know about SBI's latest announcements:

• The new one-year marginal cost of funds-based lending rate (MCLR) is down to 8.50 percent now from 8.55 percent earlier, the bank said in a statement on Tuesday.
• This is the first reduction in MCLR by SBI, which controls and sets the pricing in the system, in over 17 months. The last time it had reduced the MCLR was in November 2017 – by 5 basis points.
• The reduction in lending rate by the bank follows a 25 basis points cut in repo rate by the RBI in its first monetary policy review announced last week.
• In the February policy review too, the monetary authority had lowered the key rates by a similar quantum.
• In a 4:2 majority vote, the central bank had cut repo rate to 6 percent from 6.25 percent earlier, citing the need to support growth that has been sluggish since many months.
• SBI is the third state-run lender to lower the lending rates after Indian Overseas Bank (IOB) and Bank of Maharashtra which also lowered their loan prices by 5 bps on loan tenors of one year and above, effective from 10 April.
• Last month, SBI was first to link its short-term loans and large savings deposits rates to the repo rate from 1 May. For balances up to Rs 1 lakh, the savings bank rates would be 3.50 percent, while for balances above Rs 1 lakh effective rate would be 3.25 percent.

(With inputs from PTI)