SBI’s home loan interest rates stand out for several good reasons, which we’ll explore below.
Lowest in the Market
Unbeatable Competitiveness When it comes to home loans, SBI offers incredibly low interest rates, starting at just 9.15%. This means you’ll have much lower monthly payments (EMIs), making it accessible to more people who couldn’t qualify before. Ultimately, this reduction in EMI leads to paying less interest over the loan term.
Special Rates for Salaried
Special Deals for Salaried Individuals: SBI has a treat for you if you’re a salaried individual. You can enjoy interest rates that are up to 0.15% lower per year compared to those who are self-employed.
Interest Rates Designed for Your Risk Profile SBI’s Home Loan Interest Rates are tailored to match your risk level as a borrower. You’ll get a more favorable interest rate if you have a lower credit risk. If you have a good credit score (say above 750) and a solid income, you could significantly lower your interest rate.
SBI’s Home Loan Interest Rates for Current Customers
Advantages for Existing SBI Home Loan Customers If you’re already an SBI home loan customer and your loan’s interest rate is linked to the base rate or MCLR, you have the opportunity to save even more.
Since October 1, 2019, SBI has started offering home loans tied to the Repo Rate, which is the rate at which the Reserve Bank of India lends to banks. This External Benchmark Rate (EBLR) has dropped to 6.65% after the RBI reduced the repo rate by 115 basis points in 2020. With a margin added, SBI’s home loan interest rates range from 9.15% to 11.30%.
People Also Read: What is Working Capital?
This is significantly lower, by about 30–40 basis points than loans based on MCLR. Even though SBI has recently reduced both MCLR and base rates, they’re still higher than EBLR-based home loans.
A change from an MCLR-based loan is a bit different. The rate change doesn’t happen immediately; it happens once a year on the anniversary of your loan, based on the prevailing MCLR rates. However, with EBLR-based loans, your rate changes shortly after the RBI changes the repo rate, leading to quicker adjustments.
This gives you the option to switch from an existing MCLR or base rate loan to an EBLR loan and save on payments. There’s a fee for this switch, set at INR 5,000 plus 18% GST.
SBI’s Rates for Transferring Home Loan Balances
Competitive Rates for Transferring Home Loan Balances If you’re currently repaying a home loan at another bank with a higher interest rate, you can consider transferring the remaining balance to SBI. This move can result in lower EMIs and reduced interest payments over time.
The actual savings depend on factors like the outstanding balance, the interest rate difference, and when you make the transfer. To illustrate, let’s consider a scenario:
Imagine you took an INR 60 lakh home loan for 20 years at 9.00% three years ago. After three years, your outstanding balance is INR 56,30,202. If you transfer this balance to SBI, you might get an interest rate of 7.55% to 8.05% today. For instance, if you secure an offer at 7.60%, the following table will show you how much you could potentially save. Click here for the SBI Loan Calculator.
|Loan Details||Amount (INR)|
|Initial Loan Amount||60,00,000|
|Loan Tenure||20 Years|
|Estimated Total Interest Over 20 Years||65,87,944|
|Interest Paid in the First 3 Years||15,01,654|
|Outstanding Balance at 3-Year Mark||56,13,462|
|Revised EMI @ 7.60% for Remaining 17 years||49,094|
|Projected Interest for the Next 17 Years||44,01,750|
|Cumulative Interest for 3 Years + Projected Interest for Next 17 Years||59,03,404|
|Savings through Loan Balance Transfer||6,84,540|