SBI increases interest rates on home loans

The State Bank of India (SBI) has revised its home loan rates, hiking them by 25 basis points (bps) or 0.25% to 6.95% from 6.70% earlier.

The rates were effective from April 1, the bank said on its website. The move is likely to prompt other lenders to follow suit and increase interest rates on their home loan offerings.

The country's biggest lender last month announced a special offer on home loans, valid until March 31.

Also Read: Good news for buyers! Home loans get cheaper as banks cut interest rates

Under this, the SBI was offering home loans at 6.70% interest rate. The bank will also impose a consolidated processing fee, which will be 0.40% of the total loan amount plus applicable GST, subject to a minimum of Rs 10,999 and maximum of Rs 30,000 plus GST.

SBI had waived home loan processing fees till March 31. As per SBI's website, home loans are available at 40bps above the EBLR (external benchmark-linked rate).

The EBLR, which is linked to the RBI's repo rate, presently stands at 6.65%. This would mean that home loans are available at 7%.

Also Read: Good news for homebuyers! SBI home loan at 6.8%; processing fee waiver till Mar 

However, loan proposals where a woman is there as one of the applicants are entitled to a 5bps discount, which makes it 6.95%.

SBI had in February said that its home loan portfolio of Rs 5 lakh crore was the largest among several businesses of the lender and that it was a market leader in the individual home loan category.

The bank added that it would grow its portfolio by expediting the turnaround time for loan applications.

Also Read: HDFC joins SBI, Kotak; slashes home loan rates by 5 bps