Two new attractive home loan products from SBI

Fixed rate of 8% for 1 year followed by fixed rate of 9% / 9.5% for the next two years.

State Bank of India is launching two new home loan products on 1st July 2009, the Bank’s Foundation Day.

SBI Easy Home Loan is an attractive scheme for loans upto Rs 30 lacs. Customers who are looking to buy right-priced properties in the affordable range can avail loans at equally affordable rates. The interest rate charged on daily reducing balances will be:

• 8% pa fixed for the first year
• 9% pa fixed for 2nd and 3rd years
• From the 4th year onwards, the customer can choose between a floating rate at 2% below State Bank Advance Rate (SBAR) and a fixed rate of 1% below SBAR with a five year re-set.

The indicative EMI for the 1st year would be Rs 836 and for the next two years Rs 898 for a loan tenor of 20 years. SBAR is 11.75% wef 29.6.2009.

SBI Advantage Home Loan is another attractive scheme for home buyers in the premium segment above Rs 30 lacs.  The interest rate charged on daily reducing balances will be:

• 8% pa fixed for the first year
• 9.5% pa fixed for 2nd and 3rd years
• From the 4th year onwards, the customer can choose between a floating rate at 1% below State Bank Advance Rate and a fixed rate of 0.5% below SBAR with a five year re-set.

The indicative EMI for the 1st year would be Rs 836 and for the next two years Rs 929 for a loan tenor of 20 years.

Processing fee is waived for both products till 30th Sept 2009.

Sustained growth through Affordability and Certainty
The interest rates for the two products are low and attractive in comparison to market rates. Interest rates are fixed for 36 months enabling the customer to firm up his outflows. The risk of rise in interest rate is eliminated in the medium term. 

SBI has a home loan portfolio of over Rs 56,000 cr. The growth rate last year was 21% and SBI was the largest originator of home loans with a growth of Rs 9370 cr. The earlier scheme called SBI Special, launched on 16th Dec 2008, under the umbrella of IBA, to stimulate growth in the affordable housing sector is scheduled to close on 30th June 2009.

The reduction in SBAR wef 29.6.2009 will bring down the effective floating rates for existing borrowers by 50 bps.