With interest rate of 8.35%, SBI will help you save over Rs 1 lakh on home loans

SBI has cut the rates for home loans under Rs 30 lakh by 0.25% and for loans above Rs 30 lakh, the rates were slashed by 10 basis points.

Earlier the home loans rate were 8.6%, 0.25% more than the new rates. Photo: Pixabay

State Bank of India on Monday slashed its low cost home loan rates by 25 basis points to 8.35% which is the lowest in the banking sector.

SBI has cut the rates for home loans under Rs 30 lakh by 0.25% and for loans above Rs 30 lakh, the rates were slashed by 10 basis points.

The bank yesterday said that this announcement came in support of Prime Minister Narendra Modi's vision "Affordable Housing for all by 2020." In addition, first time buyers are also eligible for an interest subsidy of Rs.2.67 lakh under the Pradhan Mantri Awas Yojana scheme.

Moreover, this move by India's largest bank, will give a push to Real Estate (Regulation & Development) Act 2016 (RERA) which came into effect from the beginning of this month. The Act aims to bring transperancy in the real estate sector. However, this will also lead to pick up in demand for houses which will lead to demand for home loans.

Take a look at other private banks' home loan rates. Here, we have selected top three private banks- HDFC Bank, ICICI Bank and Axis Bank.

With home loans interest rate as low as 8.35%, SBI has surely become the most favourable choice for home buyers.

Now, if you look at the above table, here's how much you will save from SBI home loans.

Earlier the home loans rate were 8.6%, 0.25% more than the new rates.

Supossedly, if you take a home loan of Rs 30 lakh for a tenure of 20 years with on new rates and a processing fee of 1%, the total amount payable will drop by Rs 1,13,831 compared to old rates. Hence, the amount of total interest due will also decline.

Above is another example of Rs 50 lakh home loan for 20 years with revised interest rate of 8.5% with a processing fee of 1%. Clearly, from the above table, you will save Rs 76,074 with the new rates as against the old rates.

So, run to fulfill your dream by buying a house at such low prices and save money. You can invest the saved money in SIPs, mutual funds, EPFs and other tax saving investment options.

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