The country’s largest public lender State Bank of India (SBI) recently hiked the minimum interest rate on home loans by 25 basis points (bps) from 6.70% to 6.95%. The hiked interest rate on SBI home loans came into effect from 1 April 2021.
SBI’s hiked interest rate on home loans is likely to prompt other lenders to follow suit soon.
The public lender had lowered the minimum interest rate to 6.70% from 6.80% on 1 March 2021. However, it was a limited period offer for interested homebuyers.
The bank has not only increased the minimum interest rate from April but also added a processing fee on all home loans. SBI is expected to charge 0.40% of the loan plus GST, subject to a minimum of Rs 10,000 and a maximum of Rs 30,000 plus GST, as a processing fee.
SBI, however, mentioned on its website that for builder tie-up project where individual TIR or title investigation report and valuation is not required, the processing fee will be 0.40% of the loan amount subject to a maximum amount of Rs 10,000 plus GST.
In a scenario where TIR is required, normal charges will be applicable. Earlier, the bank had waived home loan processing fees till 31 March 2021.
The lender gave a 100% waiver on processing fees. The interest concession was based on the loan amount and CIBIL score of the borrower.
On the eve of International Women’s day, a special 5 bps concession was being made available to the women borrowers.
Last month, SBI had said that its home loan portfolio of Rs 5 lakh crore was the largest, making it a market leader in the segment. Other banks like HDFC Bank, ICICI Bank and Bank of Baroda are expected to increase home loan interest rates soon. During the limited period, the bank offered home loan starting from 6.70% for loans up to Rs 75 lakh and 6.75% for loans in the range of Rs 75 lakh- Rs 5 crore.