State Bank of India (SBI) has raised the minimum interest rate on home loans by 25 basis points (bps) from 6.70% to 6.95%,effective from April 1, 2021 making it quite evident that the interest cycle for home loan borrowers is over. SBI had lowered the minimum interest rate from 6.80 per cent to 6.70 per cent on March 1, 2021 for a limited period up to March 31, 2021. Other lenders might be prompted to follow the hike initiated by SBI.
The Bank will also charge a consolidated processing fee. This will be 0.40 per cent of the loan amount plus applicable GST, subject to a minimum of ₹10,000 and maximum of ₹30,000 plus GST.
As per the Bank’s website, for builder tie-up projects where individual TIR (title investigation report) and valuation is not required, the processing of aforementioned fee will be 0.40 percent of loan amount subject to maximum recovery of ₹10,000 plus applicable tax. And where TIR and Valuation is required, then normal charge will be applicable The Bank had waived home loan processing fees till March 31, 2021.
SBI took about 10 years to grow its home loan portfolio from ₹89,000 crore in FY2011 to touch the ₹5 lakh crore mark, Chairman Dinesh Kumar Khara told the media in February 2021.
The Bank also said it expects to double its home loan portfolio in the next five years to Rs ₹10 lakh crore on the back of higher economic growth and growing preference of the new generation to buy a home early.