A look at banks and institutions that have cut their home lending rates

Insurance

oi-Sunil

By Sunil Fernandes

Published: Wednesday, September 3, 2014, 10:23 [IST]

Home loan lending rates are falling and this is good news for home loan borrowers. A small cut in home loan can make a big difference, because these are largely big ticket loans. Also, they cover a longer duration, which means interest costs reduce dramatically even with a small cut in home loan rates. Here are a few institutions and banks that have cut their home lending rates.

State Bank of India (SBI)

If the country's largest bank cuts rates others tend to follow. SBI has reduced the interest rate by 15 bps or 0.15 per cent to 10.15 per cent from 10.30 per cent. For women borrowers, there is even more good news as the rate will be lesser at 10.10 per cent. The new rates have already come into effect.

But, here's something that you must note, as far as SBI Home loans are concerned. The rate cut will actually help only individuals who are borrowing over Rs 75 lakhs since the bank is already lending at 10.15 per cent for loans that are under Rs 75 lakhs at 10.15 per cent.

Punjab National Bank

Punjab National Bank (PNB) is offering home loans of up to Rs 2 crore at 10.25 percent. For those above Rs 2 crore, customers are to be charged 10.50 percent. Prior to this PNB, was charging 10.25 per cent interest for loans of up to Rs 75 lakh and 10.50 percent for the loans above that amount.

HDFC

HDFC had reduced its interest rate on loans above Rs 75 lakh to 10.15 per cent under its monsoon bonanza scheme.

Interest rates may remain steady at current levels

Interest rates are unlikely to fall very much going forward, given the fact that inflation still remains high and the RBI may not cut interest rates aggressively going forward. So, if you intend to take a loan, it may not be a bad time to for it.

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