HYDERABAD:Home loan borrowers can cheer as nationalised banks are likely to unleash a rate war to remain competitive.
The State Bank of India on Sunday reduced home loan rates by up to 0.25% for new borrowers. The revised rates will be effective Monday.
State Bank’s revised rate is in line with its competitor and largest mortgage provider HDFC Ltd, which cut home loan rates by 0.2% to 9.9% for both new and existing borrowers.
It may be noted that, under pressure from RBI Governor Raghuram Rajan, three banks SBI, HDFC and ICICI have reduced their base rates on April 7. The move was expected to trigger a rate war among banks in the weeks to come.
“Our Asset-Liability Committee (ALCO) will meet this week to take a call on rate cuts,” S K Kalra, Executive Director, Andhra Bank told Express. V R Iyer, CMD, Bank of India recently said the public sector bank too will revise rates in April.
According to SBI, home loan rate stood at 10.1% for women borrowers prior to the reduction in base rate. It will now be 9.85%. For other borrowers, the new rate is 9.9%, down from 10.15% before base rate cut.
The revised EMI per Rs 1 lakh for 30 years will be Rs 867 (for women) and Rs 871 for others as against Rs 885 and Rs 889 respectively.
As on December 2014, SBI had an outstanding housing loan of Rs 1,52,905 crore as against Rs 1,35,129 crore a year ago - a growth of 13.15%.
Meanwhile, SBI said, the bank reduced base rate to 9.85 % effective April 10 following loans linked to base rate including housing were reduced. Interest rate for SBI’s existing floating rate home loan borrowers too has been reduced to the extent of reduction in the bank’s base rate to 9.85 per cent effective April 10, it added.