SBI slashes home loan rates, HDFC follows with ‘special winter bonanza’
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A day after the Reserve Bank of India (RBI) decided to keep repo rate unchanged, State Bank of India (SBI) has slashed the home loan rates by up to 35 basis points and unveiled a further discount of 5 basis points for women customers.
Within hours of the SBI announcement, HDFC, which had hiked the rates by 10 basis points two weeks ago, announced a cut of up to 50 basis points in home loan rates in its "special winter bonanza".
According to SBI, loans of up to Rs 75 lakh would be available to fresh borrowers at 10.15 per cent against the existing rate of 10.50 per cent. For women borrowers, the rate of interest after an additional concession of 0.05 per cent would be 10.10 per cent for home loans of up to Rs 75 lakh.
For loans above Rs 75 lakh, the interest will be 10.30 per cent for regular customers and 10.25 per cent for women.
The revised EMI per lakh for a loan tenure of 30 years will be Rs 885 for women and Rs 889 for others against the prevailing EMI of Rs 900.
Bank officials said the cut in rates is due to the reduction in the risk weightage and poor demand for home loans.
The change in risk weightage has prompted SBI to create a new slab of up to Rs 75 lakh. In June, the RBI reduced risk weightage to 50 bps for home loans up to Rs 75 lakh, and 75 bps for loans above 75 lakh.
The new rates for HDFC's home loans up to Rs 75 lakh will be 10.25 per cent per annum. "This is a limited period offer and is valid for all new applications submitted before January 31, 2014 and first disbursement taken by February 28, 2014," HDFC said in a statement.