SBI offers discount of 25 bps on home loans

State Bank of India (SBI), the country’s largest lender, on Wednesday said it would offer a discount of 25 basis points (bps) to prospective floating home loan customers during the festive season. The move follows leading home loan players like ICICI Bank and HDFC launching fixed-cum-floating home loans to attract customers during the festive season.

The 25-bps discount on home loan card rates is applicable to all amounts and is valid till December 31, according to the bank’s website. With this concession, the rate of interest on home loans up to Rs 30 lakh is now 10.50 per cent, while for loans between Rs 30 lakh and Rs 70 lakh, the interest rate would be 10.75 per cent. For loans above Rs 75 lakh, the interest rate would now be 11 per cent.

HDFC offers two fixed-floating home loan products: One with fixed interest rates for the first three years, and the other with fixed rates for the first five years. ICICI Bank, too, offers two such products, with fixed rates for one and two years.

SBI also indicated it may raise the base rate in two-three weeks. The floating rates could then rise again. However, the bank may further increase the concession to benefit from the rise in the demand for home loans during the festive season, which is spread over the next two-three months.

Owing to high interest rates, the demand for loans has remained slack this year, and this has prompted lenders to offer discounts on retail loans to attract customers in the festive season.

Source: Business Standard