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Our Bureau

Mumbai, Aug. 7 State Bank of India on Friday introduced a new home loan scheme whereby a borrower can take a home loan up to Rs 5 lakh at 8 per cent (fixed interest rate) for five years.

The bank also tweaked the interest rate on home loans up to Rs 50 lakh and over Rs 50 lakh and tenor for which the rates are applicable. The bank, in a statement, said it will not charge any processing fees during its ongoing ‘My Home’ campaign.

The bank introduced the Rs 5-lakh home loan at a fixed rate of 8 per cent for five years, as in the first quarter almost 25,000 of the around 75,000 home loan applications received were in the up to Rs 5 lakh category.

“In the first quarter (April-June 2009), our bank disbursed loans amounting to Rs 3,450 crore against Rs 1,678 crore in the corresponding period last year. There is good demand for home loans in non-metros. Hence, we have kicked off a new home loan campaign at competitive interest rates,” said Mr P. Nandakumaran, Chief General Manager, SBI.

At the end of the five-year period, a customer opting for the Rs 5 lakh home loan can choose between a floating rate of 2.75 per cent below the State Bank Advance Rate (currently at 11.75 per cent) or a fixed rate of 1.25 per cent below SBAR for a further term of five years.

For home loans of Rs 50 lakh, the bank will offer 8 per cent during the first year and 8.5 per cent (9 per cent in the earlier Rs 30 lakh home loan scheme) for second and third years.

From the fourth year, the customer can choose between a floating rate of 2.75 per cent (2 per cent earlier) below SBAR or at a fixed rate of 1.25 per cent (1 per cent earlier) below SBAR.

For over Rs 50 lakh loans, the bank will charge 8 per cent during the first year and 9 per cent (9.5 per cent in the earlier over Rs 30 lakh home loan scheme) for second and third years. From the fourth year, the customer can choose between a floating rate of 1.75 per cent (1 per cent earlier) below SBAR or at a fixed rate of 0.75 per cent (0.50 per cent earlier) below SBAR.

More Stories on : Public Sector Banks | Housing Finance | State Bank of India

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