New Delhi: India’s largest public lender State Bank of India (SBI) recently increased the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent. New interest rates on SBI home loans came into effect from April 1, 2021.
SBI’s revised interest rate on home loans is likely to prompt other lenders to follow suit soon, which will supposedly further increase home loan interest rates of banks like HDFC Bank, ICICI Bank and Bank of Baroda, who are also expected to increase home loan interest rates soon.
Notably, the public lender had lowered the minimum interest rate to 6.70 per cent from 6.80 per cent on March 1, 2021. However, it was a limited period offer for interested homebuyers.
Additionally, the bank has not only increased the minimum interest rate from April but has added a processing fee on all home loans. SBI is expected to charge 0.40 per cent 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’s website, however, states 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 per cent of the loan amount subject to a maximum amount of Rs 10,000 plus GST.
In a such cases where TIR is required, normal charges will be applicable. Earlier, the bank had waived home loan processing fees till March 31, 2021.
Last month, SBI said that its home loan portfolio of Rs 5 lakh crore was the largest, making it a market leader in the segment.