State Bank of India (SBI) on Saturday slashed interest rates on new home loans to eight per cent. SBI is India’s largest bank and the rate cut is expected to result in all banks slashing home loan rates.
The new SBI rate will be fixed for a year. The only existing customers to whom the eight per cent rate would be applicable are those who’ve availed of loans under the special scheme launched last month, under which loans up to Rs 5 lakh were given at 9.25 per cent and up to Rs 20 lakh at 9.75 per cent.
After a year, the rate will be reset to the one prevailing for the scheme under which the loan was taken. Hence, if a customer takes a loan of up to Rs 20 lakh under the special scheme at 9.75 per cent, the rate for the first year would be 8 per cent.