Offering some relief to Home Loan payers, India’s biggest Public Sector Lender State Bank of India (SBI) has reduced its external benchmark based rate (EBR) by 25 bps to 7.80 percent per annum, from 8.05 percent per annum. The revision will be effective from January 1, 2020.
This reduction will bring down the interest rate for existing home loan customers as well as MSME borrowers, who have availed loans linked to external benchmark based rate, by 25 basis points.
The lenders said that new home buyers will be able to avail loans at an interest rate starting from 7.90 percent per annum, as compared to 8.15 percent earlier.
SBI’s external benchmark based lending rate, which is synced with RBI’s repo rate (currently at 5.15 percent), is fixed at repo rate plus 265 basis points.
Besides, SBI levies a premium of 10 basis points to 75 basis points for pricing the effective interest on the home loan for the customer.
In October, the RBI had reduced its benchmark lending rate or repo rate by 25 basis points to 5.15 percent, the lowest since March 2010. But in this month’s review, the apex bank left the interest rates unchanged.