Tuesday, July 8, 2008

SBI raises floating rate on home loans by 0.5 per cent

HDFC, ICICI Bank have already increased home loans rate by 0.75 per cent.

State Bank of India, the country's largest lender, has increased its floating home loan rate by 50 basis points across all tenors with effect from 27 June, the day on which the bank increased its PLR by 0.5 per cent.

For home loans of up to Rs30 lakh and 20 and 25 years tenure, the interest rate has been increased by 0.5 per cent to 11 per cent against 10.5 per cent, SBI said in a release.

Equated monthly installment (EMI) for 25 years would go up from Rs945 to Rs980 per one lakh while for 20 year EMI would go by Rs35 to Rs1,035.

For housing loans with maturity between 10 and 15 years, the interest rate has gone up to 10.75 per cent. EMIs under these maturities would go up to 35.

For five years, the new rate of interest is 10.5 percent, against 10 percent earlier. EMI in the category would rise by Rs 25 to Rs 2150 per one lakh.

For housing loans above Rs30 lakh, the increase is 0.5 per cent across all tenors. The maximum rate in the segment has gone up to 11.25 per cent.

SBI, however, has left fixed rate home loan untouched at 12.75 per cent.

Floating interest rate is linked to State Bank Advance Rate(SBAR) 12.75 per cent per annum, it said.

The decision follows Reserve Bank's 24 June announcement of a 0.5 per cent hike in both its short-term lending rate to banks and the cash reserve requirement of banks.
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