The lower interest rates charged by the State Bank of India (SBI) are contributing to a growth in its home loan portfolio at a time when the sky-rocketing real estate prices have slowed the credit demand. While fresh loans for buying houses are growing albeit at slow pace, buying out other banks' home loans is helping the public sector bank to strengthen its home loan book.
Some public sector banks, including State Bank of India (SBI), Union Bank of India, Canara Bank, and Bank of India, are increasing the spread on home loans for new customers to protect margins.
SBI's home loans, which offer a lower interest rate in the initial years and rate increases in the later years, were termed teaser loans by the Reserve Bank of India.
ICICI Bank is offering the salaried having an account with it, credit from Rs 500,000 going up to Rs 1 crore against property owned by them
Amid concerns expressed by the Reserve Bank of India, the country's largest lender State Bank of India on Wednesday announced withdrawal of special home loan schemes, or teaser rates, with effect from May 1.
Home loan rate for new customer is 9.9 per cent.
Despite rising interest rates, leading home loan players SBI and HDFC have announced discounted interest rates beginning at 8.40 per cent as part of their festive offerings. SBI in a statement said that its home loan book has topped the Rs 6 lakh crore mark, a first in the industry. The leading lender said it is offering up to 25 bps discount on interest rate to new home loan borrowers, making the entry level rate at 8.40 per cent and the offer will run up to January 31, 2023.
The bank has increased fixed rate home loans by 50-75 bps. While rates for loans of up to five years have been increased to 9.25% from 8.50% per annum, loans for above five years.
Home loans of up to Rs 75 lakh (Rs 7.5 million) would now be available to fresh borrowers at 10.10 per cent against the existing rate of 10.15 per cent, State Bank of India said in a statement.
The interest rate scheme where 8 per cent is frozen for one year may not actually be as profitable as it appears upfront.
SBI, the country's largest lender, first announced a rate cut of 0.25 per cent in its home loan rates on Thursday, forcing HDFC, the second biggest home loan financier, to respond.
SBI home loans will now be available under two slabs -- under Rs 75 lakh (Rs 7.5 million) and above Rs 75 lakh.
Country's largest lender State Bank of India on Wednesday said it will extend its 8 per cent concessional home loan scheme, popularly called teaser rates, by another 3 months till December.
Ask rediffGURU and PF, MF and insurance expert Purshotam Lal your mutual fund, insurance and personal finance-related questions.
SBI fixed its base rate, the minimum lending rate, at 7.5 per cent which would replace its benchmark prime lending rate from Thursday.
State Bank of India on Thursday said that equated monthly instalments on its home loans will be tweaked shortly as interest rates have gone up by two per cent in the last one year.
Bank will charge floating rates of interest from January.
State Bank of India has raised interest rates on the domestic term deposits by 0.25 to 0.50 per cent across various maturities effective from November 29.
A teaser loan is one where the lender offers a slightly lower rate in the initial years and then charges higher rates in later years.
Gaurav Mohta, chief marketing officer, Home First Finance Company will answer your home loan queries.
The Enforcement Directorate has attached assets worth approximately Rs 112.90 crore, including a residential property in Texas, USA, in a money-laundering case. The case involves a Noida-based air-conditioner components manufacturer, LEEL Electricals Limited, and its promoters, accused of defrauding a consortium of banks led by SBI of Rs 376 crore through manipulated financial statements and siphoning off funds.
SBI said it could give discount to new housing credit seekers and might cut home loan rates. SBI is currently offering home loans at 12.75 per cent on fixed interest rate basis. The floating interest rate ranges between 10.75-11.25 per cent.
Wait for some days, as other lenders are likely to follow suit. You can also negotiate for a lower rate before deciding on a change of bankers.
State Bank of India on Wednesday said it did not have any immediate plans to revise its home loan rates, including that of the 8 per cent special scheme originally slated to end this week.
Rising rates prompt extension by 10 more years; others may follow suit.
State Bank of India has no plans to hike its corporate lending rates in the short term, but said there was a chance of home loan rates going up after Reserve Bank of India tightened norms for the housing sector.
State Bank of India on Friday launched an initiative to provide doorstep services and expedite home loans application process.
The home loan scheme offers a discount in the interest rate for the first three years. The interest rate structure of the scheme remains unchanged, said a top SBI official.
Chartered accountant and Sebi registered investment advisor, Harsh Vardhan Roongta, answers your home loan queries
With real estate prices dropping, action is hotting up in the home loan market. State Bank of India, the country's largest lender, said on Tuseday that it had improved upon its home loan scheme and would offer home loans starting at 8 per cent in the first year before rising 100-150 basis points in the second and third years.
For home loans up to Rs 30 lakhs (Rs 3 million) for 20 and 25 year period, the interest rate has been increased by 0.5 per cent to 11 per cent against 10.5 per cent, SBI said. Equated Monthly Instalment for 25 years would go up from Rs 945 to Rs 980 per lakh while for 20 years EMI would go up by Rs 35 to Rs 1,035. Housing loan with maturity between 10 and 15 years has gone up to 10.75 per cent. EMIs under these maturities would go up as much as by Rs 35.
"We are still examining the market condition and will take a view on home loan rates in another week or 10 days," SBI Chairman O P Bhatt told reporters. SBI had increased its PLR by 50 basis points to 12.75 per cent last week. Following the hike in lending rates, the bank also increased deposits rates for various maturities.
Under the earlier scheme, borrowers were charged fixed interest rate of 8.5 per cent for Year 2 and Year 3 for loan amount less than Rs 50 lakh (Rs 5 million) and a rate of 9 per cent for first three years for loan amount of greater than Rs 50 lakh. Year 4 onward the interest rate was fixed at PLR minus 2.75 basis points.
Under the earlier scheme, borrowers were charged fixed interest rate of 8.5 per cent for Year 2 and Year 3 for loan amount less than Rs 50 lakh (Rs 5 million) and a rate of 9 per cent for first three years for loan amount of greater than Rs 50 lakh. Year 4 onward the interest rate was fixed at PLR minus 2.75 basis points.
The recently changed State Bank of India's (SBI's) formula to calculate home loan rates has stumped many.
Less than a week after its teaser home loan scheme expired, HDFC has re-launched it at slightly higher rates. And, SBI is also likely to extend its own teaser rate scheme, due to expire on September 30, a top official said on Monday.
State Bank of India is keen to encourage women to take home loans.
