SBI reduces home loan interest rate by 25 basis points

State Bank of India (SBI) on Monday announced a rate cut in the home loans category by 25 basis points to 8.35 percent per annum in line with Prime Minister Narendra Modi's initiative of 'Housing for All' by 2022.

Effective from May 9th, with this reduction, SBI becomes the only bank in the market to offer loans at such low interest rates.

The effective interest rate for all eligible salaried customers will be 8.35 percent per annum for loans up to Rs. 30 lakhs. Over and above, an eligible home loan customer can also avail of an interest subsidy of Rs. 2.67 lakhs under the Pradhan Mantri Awas Yojana scheme.

The interest rates offered to customers availing a home loan above Rs. 30 lakhs have also been reduced.

To supplement the affordable housing push, SBI has also come out with special offerings for Construction Finance to the builders for affordable housing projects.

This will give a dual push both for Construction Finance and also for Home Finance for affordable homes.

"We have seen a steep hike in the Home Loan enquiries recently and reduction in rates will further help millions of home buyers fulfill their dream of owning a home," said MD NBG, SBI, Rajnish Kumar.

He said that individuals can now apply for home loans through multiple channels.

Earlier, SBI slashed its base rate to 9.10 percent. It also announced a cut in its marginal cost of funds-based lending rate (MCLR) by 90 basis points.