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As banks cut down lending rates, home loans to go down to their lowest point in six years

Apart from SBI, several other banks including Union Bank of India and the Punjab National Bank have also decide to cut down rates.

By: Express Web Desk | New Delhi | Published: January 2, 2017 4:05 pm
home loan, sbi, icici home loan, home loan rates, interest rates home loan, business news Representational image.

After Prime Minister Narendra Modi’s directive to banks on New Year’s address to act in “public interest” by focusing more on aiding the poor, lower middle class, middle class and senior citizens, several banks have announced steep cuts in borrowing rates. Some of the leading banks in the country, including State Bank of India, lowered their borrowing rates by up to 90 basis points.

Because of the banks decision to reduce interest rates, the home loans rates will fall down to their lowest point in last six years. The State Bank of India announced their decision to cut home rates from 9.10 per cent to 8.6 per cent. SBI on Sunday announced its decision to reduce one-year marginal cost of lending rate (MCLR) to 8% from 8.9%. Since, MCLR is the benchmark against which home loans are linked, the rates will see a huge downfall. A home loan of Rs 75 lakh which was earlier available at 9.1%, will now be available at 8.6%. Apart from SBI, several other banks including Union Bank of India and the Punjab National Bank have also decide to cut down rates.

Here is a list of banks and their new home loan interest rate:

SBI home loan interest rate: 8% from 8.9%

Union Bank home loan interest rate: 8.65% from 9.3%

IDBI Bank home loan interest rate: 9.15% from 9.3%

SBT home loan interest rate: 9.2% from 9.45%

IOB home loan interest rate: 9.15% from 9.5%

PNB home loan interest rate: 8.45% from 9.15%

The steep cut has been facilitated by the surge in deposits during the demonetisation period, which led to a substantial fall in cost of funds for lenders. Banks have mobilised an estimated Rs 14.9 lakh crore of deposits following demonetisation during the last 50 days.

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  1. Vihari Naidu
    Jan 2, 2017 at 12:55 pm
    So savings rate is also reduced. Waste to save money in banks now. The only avenue for a middle cl family is to save money. Now it is closed.
    1. A
      Jan 2, 2017 at 10:51 am
      How is it going to help reduce the price of real estate as promised by Mr. Modi? We were expecting that the black money from real estate mafia, which is hand in gloves with the political parties, will be brought to records. We have not seen anything like that. Additionally, what the banks have collected from the public is a mive amount, only a fraction will be given to the middle cl (who qualify) at NOT A SUCH ATTRACTIVE RATE. I wonder why is IE trying to make a mount out of a mustard seed (rai ka pahad)!!!!
      1. A
        Jan 2, 2017 at 12:05 pm
        WHERE IS THE BLACK MONEY AND WHAT DID THE PM REPORTED ON THAT? A big chunk of the money collected by the banks goes to the friends of PM while poor get the peanuts.
        1. C
          chetan B
          Jan 2, 2017 at 2:53 pm
          We received the message from SBI, that is the interest rate is now 9.35%. Earlier it was 9.10%.
          1. J
            Jan 2, 2017 at 6:21 pm
            how dumb can you get? Where does bank get the money to pay you higher interest rate?lt;br/gt;Don't be stupid !!!
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