Banks Low Home Loan Interest Rates to Boost Housing Sales

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Several banks such as State Bank of India (SBI), Kotak Mahindra, Bank of Baroda (BoB), and Punjab National Bank (PNB) have announced low-interest rates for housing loans, and real estate experts say that this is expected to push sales during the festive season and benefit affordable and mid-segment homebuyers. State Bank of India (SBI) will charge home loan borrowers an interest of 6.7% based on their credit score, irrespective of the loan amount. The offers are available to all segments of borrowers. The 6.7% home loan offer is also applicable to balance transfer cases. Kotak Mahindra Bank has reduced its home loan interest rates by 15 basis points (bps) from 6.65% to 6.50% p.a. This special rate of 6.50% p.a. is a limited period festive season offer beginning September 10 and ending on November 8, 2021. Bank of Baroda (BoB) is offering a waiver of 0.25% in the existing applicable rates for home and car loans. In addition, the bank is also offering a waiver of processing fees in home loans. Now, home loan rates will start at 6.75% and car loan rates start at 7.00%. Punjab National Bank (PNB), too, has slashed the repo-based lending rate by 25 basis points (bps) to 6.55%. The Housing Development Finance Corporation (HDFC) has joined the festive season home loan interest rate war between lenders by cutting rates by 45-60 basis points (bps) for borrowers with credit scores above 800 for loans above Rs 75 lakh. Customers can avail of new home loans starting at an interest rate of 6.70 per cent per annum, irrespective of the loan amount or employment category. Last week, SBI announced festive offers for prospective home loan customers, including a credit score-linked home loan starting at 6.70 percent, irrespective of the loan amount. Earlier, a borrower availing a home loan above Rs 75 lakh had to pay an interest rate of 7.15 percent. “This move is aptly timed, coinciding with the beginning of the festive season. This year, we are likely to see significantly improved traction in the housing segment during this period. Waiving of processing fees and occupation-linked interest premium are added levels of savings. Cumulatively, this package is the most compellingly attractive offering ever extended by a housing loan lender and it is reasonable to expect that other lenders will follow SBI's footsteps in order to remain competitive,” said Anuj Puri, Chairman – ANAROCK Group.