The new rates will be effective from May 9.
India's largest lender, the State Bank of India (SBI), on Monday announced a steep reduction of 25 basis points (bps) in affordable housing loans to 8.35 per cent for new borrowers.
Under the new government scheme, loans under Rs 30 lakh qualify for affordable housing.
For male borrowers, the limited period offer is valid till July 31 and the reduction is 20 bps to 8.40 per cent, SBI Managing Director for national banking Rajnish Kumar told PTI in a conference call.
The new rate reduction of 25 bps for women will be for salaried borrowers. For non-salaried borrowers, it will be a 20 bps cut.
Similar rates will be applicable for male salaried and non-salaried borrowers.
One percentage point is 100 bps.
"This a huge saving for the borrower as the 25 bps reduction translates into a saving of Rs 530 per month on EMIs," he said.
The new rates will be effective from Tuesday.
"This is giant leap to give a fillip to the affordable housing segment keeping the Prime Minister's vision of providing 'housing for all' by 2022," Kumar said, adding that the lender now offers the lowest rates in the industry.
With a home loan book of Rs 2.23 lakh crore, SBI leads the segment with 25-26 per cent market share, Kumar said further.
However, he is of the view that the new offer may not push up SBI's market share significantly as 45 per cent of its 2.23 lakh crore home loan book is under the Rs 30 lakh bracket.
Photograph: Danish Siddiqui/Reuters