Explained: Is SBI repo-linked home loan product good for retail borrowers?

Higher initial payout is an entry barrier, but interest burden will fall and more tax benefit can be availed of

With the Reserve Bank of India (RBI) making it mandatory for banks to introduce products linked to external benchmarks — the repo rate, three-month Treasury bill, six-month Treasury bill or any rate published by the Financial Benchmark India (FBIL) — from October 1, the country’s largest bank, State Bank of India (SBI), has already introduced the first repo rate-linked home loan product.

While other banks have to launch their products by October 1, and there are reports that even non-banking financial companies will offer products linked to external benchmarks, SBI’s product has some interesting things to offer to the potential