SBI home loan interest rate slashed! More good news coming, say real estate developers
After SBI cut home loan interest rate, a move that is pro-homebuyers, other banks are also likely to follow RBI directive and cut rates too, said real estate developers. They hailed SBI's move.
SBI or State Bank of India has reduced the home loan interest rate by 25 bps to 7.9 per cent from existing 8.15 per cent. This will lead to a whopping saving of around Rs 1,86,960 for a homebuyer on a home loan of Rs 50 lakh taken for 20 years. Real estate developers have hailed the SBI move and said that the RBI (Reserve Bank of India) has reduced Repo Rate but the retail bankers haven't passed the entire benefit to the home loan applicants but after SBI's pro-homebuyers approach other banks will also follow the RBI directive.
Speaking on the reduction in home loan interest rate by SBI Dinesh Jain, MD at Exotica Housing said, "The interest rate of a home loan is very sensitive for all home buyers. Any change in the interest rate affects their pockets directly. In 2019, the RBI reduced the repo rate by 135 basis points and urged banks to pass on the advantage. When the banks did not reduce lending rates as per expectations of RBI, the central bank had to take steps like repo linked lending rate which is applicable to both new and old customers. Low-interest rate is a booster for the housing sector. It is expected that after SBI's cut in interest rates, other banks will also reduce their interest rates soon."
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Giving an inkling about the benefit for a homebuyer on his EMI for a home loan of Rs 50 lakh for the period of 20 years, Suresh Garg, CMD at Nirala World said, "This is in fact the result of external benchmarking by the RBI. Only after the introduction of the repo linked lending rate, financial institutions brought interest rate up to this level. This is like a good start to the new year for the real estate sector when homebuyers will get a home loan below 8 per cent, from 8.15 per cent to 7.90 per cent. Reducing interest rates is very important to promote affordable housing and to achieve the goal of Housing for All 2022. A home buyer will be able to save almost Rs. 6504 yearly on a home loan of Rs. 30 lakh for 20 years."
Garg said that scenario for home loan of Rs 50 lakh for 20 years at 8.15 per cent home loan interest rate on, one's EMI would be Rs 42,290 per month while in changed SBI home loan interest rate, the new home loan EMI will be Rs 41,511 means in 20 years, a new home loan applicant would be able to save up to Rs 1,86, 960.
Speaking on SBI home loan interest rate going down by 25 bps; Ashish R Puravankara, MD, Puravankara Limited said, “Home loans are, by far, one of the biggest loans quantum-wise. Customers are always on the hunt for low-interest rates while opting for home loans. In this scenario, the decline in interest rates, from SBI is a welcome move. The rate cut is not only a relief to home buyers, but it proved to be beneficial for the entire sector. It will also infuse a positive sentiment in the residential segment and acts as a confidence booster for many potential home buyers. Such initiatives will revitalize the entire realty ecosystem by helping all the stakeholders such as homebuyers, developers, investors, and the government. This will certainly keep the momentum going and the industry is set to witness a positive growth curve in the coming years. We, at Puravankara, also hope that this move will start a trend which will be followed by other lending institutions, further widening the web of benefits for the home buyers across the country, eventually pushing the overall demand for homes.”
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