India’s largest lender State Bank of India on Monday announced a steep reduction of 25 basis points 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.
The SBI cut low-cost home loan (under Rs 30 lakh) rates by 0.25% to 8.35%. For home loans above Rs 30 lakh, the rates come down by 0.10%.
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 concall.
The new rate reduction of 25 per cent for women will be for the salaried borrowers and for the non-salaried, it will be 20 bps cut.
Similar will be the rates applicable to male salaried and non-salaried borrowers.
One percentage point is 100 basis points (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 Tuesday, May 9.
“This is a 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 trillion, 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 its market share significantly as 45 per cent of its Rs 2.23 trillion home loan book is under Rs 30 lakh bracket.