Leading banks SBI and ICICI, on April 7, 2016, cut their home loan rates by 0.1%, to 9.4%, following the implementation of a new interest rate calculation regime mandated by the RBI.
The lending rates of other banks may also fall soon, with the Marginal Cost of Funds-based Lending Rate (MCLR) system coming into force from April 1st. The RBI had asked banks to price their fixed-rate loans of up to three years, based on their marginal cost of funds from April 1. All banks have to follow the MCLR system, a new uniform methodology which will ensure fair interest rates to borrowers, as well as to banks.
If banks decide to pass on the latest 0.25% policy rate cut announced by the RBI on April 5, the rates for borrowers may go down further.
The State Bank of India in a statement, said that it has fixed its home loan interest rate at 9.45%, which is 0.25% more than its one-year marginal cost of fund-based lending rate of 9.20%. However, women borrowers can avail of the loans at 9.40% (0.20% above the MCLR), it said. The new rate is applicable from April 1, it said.
See also: Benefits of buying a home in the wife’s name
Earlier, SBI’s home loan rates stood at 9.5% for women borrowers and 9.55% for others.
ICICI Bank’s effective rate of interest will go up to 9.65% for women borrowers who take loans of over Rs 5 crore, under the floating rate of interest. The weaker section of borrowers, will be able to avail of loans of up to Rs 25 lakh at 9.40%.
According to ICICI Bank’s website, the full tenor fixed rate loans will be sold at 9.75% for loans up to Rs 30 lakh and it will be between 9.85%-10.10% for loans above Rs 30 lakh.
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