SBI cuts home loan interest rate to 8.35% for new borrowers

The State Bank of India (SBI) on Monday announced a steep reduction of 25 basis points in affordable housing loans to 8.35 percent for new borrowers. With a 25 percent market share, SBI is the country’s largest lender.

Under the new government scheme, loans under Rs 30 lakh qualify for affordable housing.

For male borrowers, the limited period offer is valid till July 31 and the reduction is 20 bps to 8.40 percent, SBI managing director for national banking, Rajnish Kumar, told news agency PTI in a conference call. One percentage point is 100 basis points (bps).

The new rate reduction of 25 bps, to 8.35 percent, will be applicable for salaried women borrowers. For non-salaried women, the rate reduction will be 20 bps. Similar rates will be applicable to salaried and non-salaried borrowers.

“This a huge saving for the borrower as the 25 bps reduction translates into a saving of Rs 530 per month on EMIs,” he said. The new rates will be effective tomorrow.

“This is giant leap to give a fillip to the affordable housing segment keeping the prime minister’s vision of providing ‘housing for all’ by 2022,” Kumar said, adding that the lender now offers the lowest rates in the industry.

With a home loan book of Rs 2.23 trillion, SBI leads the segment with 25-26 percent market share, Kumar said further.

However, the new offer may not push up the bank’s market share significantly as 45 percent of its Rs 2.23 trillion home loan book is under Rs 30 lakh bracket, Kumar concluded.

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