Home Loans To Be Cheaper As SBI Cuts Rate to 7%
State Bank of India, the country's largest lender, has announced a 25 basis point reduction in its marginal cost of funds-based lending rates (MCLR) for its one-year tenors, effective July 1. After this reduction in rates this fiscal, home loan rates of the public lender would come down to seven per cent. SBI has also reduced it repo rate linked home loan rates to 6.25 per cent.
In October, SBI had also launched repo rate-linked home loans, following a mandate from the Reserve Bank of India (RBI).
The public lender has also cut its base rate by 75 basis point, from 8.15 per cent to 7.40 per cent, with effect from June 10, 2020.
Falling interest rates
While several banks have pared their marginal cost of fund-based lending rates (MCLR) since the RBI started the rate cut spree, more reduction in interest rates is on the cards in times to come, with the repo rate touching an all-time low. The RBI has lowered its repo rate to 4 per cent. Financial institutions are expected to implement further cuts in rates as pressure builds on them, to assist the economy in getting out of an ongoing slowdown amid the coronavirus outbreak, especially in the real estate sector.