State Bank of India, Bank of Baroda reduce home loan rates by 25-45 bps

 For new home loans of Rs 75 lakh and above, SBI will charge 6.7 percent as against the previous 7.15 percent

In an effort to grow their home loan business, the State Bank of India (SBI) and Bank of Baroda (BoB) have slashed rates by 25-45 bps and introduced key changes. For new home loans of Rs 75 lakh and above, SBI will charge 6.7 percent as against the previous 7.15 percent. The country’s largest lender will also offer credit score-linked home loans at 6.7 percent, irrespective of the loan amount.

Besides, SBI has also done away with the distinction between salaried and non-salaried borrowers — there will be no occupation-linked interest premium charged for prospective home loan borrowers. Earlier, the rate of interest applicable for a non-salaried borrower was 15 bps higher than a salaried borrower.

SBI executives said while keeping their focus on affordable housing and small-ticket loans, the bank wants to increase its business in large-size loans (Rs 75 lakh and above). These customers have a high credit score and are in a position to negotiate the best deals.

“When a challenge is thrown at us, the bank will respond in an effective way without diluting eligibility norms,” a top SBI executive said.

Meanwhile, Bob said it will offer a waiver of 25 basis points on the existing rates for home and car loans, along with a waiver of the processing fee in home loans. Now, the bank's home and car loan rates will start from 6.75 per cent and 8 per cent, respectively.

Last week, Kotak Mahindra Bank reduced its home loan rates by 15 bps to 6.5 per cent, making it one of the lowest rates in the country in over a decade.