With effect from 1st April 2021, State Bank Of India, the largest public lender of India, has announced a hike in the home loan rate by 25 basis points (bps). This essentially means that SBI has revised its home loan interest rate of 6.70% introduced in March to 6.95%.
On March 10, 2021, the State Bank of India (SBI) had lowered the interest rates to the lowest rate of 6.70%. They offered concessions up to 70 basis points and home loans starting at 6.70% interest per annum. This also included a certain percentage charge of the home loan amount, between 0.50% and 2% as the processing fee, depending on the borrower’s credit score and loan amount.
Along with the news that SBI hikes home loan rate to 6.95%, it should also be noted that the bank will, in addition, levy a consolidated processing fee on housing loans. The processing fee, which was waived off for March, is now set to 0.40 percent of the total loan amount and the goods and services tax (GST); subject to a minimum of Rs 10,000 and a maximum of Rs 30,000 plus GST.
What Was The Action Taken By Other Indian Banks When SBI Cut Home Loan Rate To 6.70% In March 2021?
Though SBI reduced its home loan rate to the ever-lowest rate of 6.70&%, other Indian banks struggled to reduce their lending and deposit rates.
With the current hike in housing loan rate to 6.95%, however, it is highly likely that all other banks and lenders will follow the suit.