With the onset of the festive season, several banks in the country have cut their home loan rates to make housing more affordable for customers. India's three major public-sector banks; the State Bank of India (SBI), Punjab National bank (PNB), and Bank of Baroda (BoB), and one private lender Kotak Mahindra Bank announced some offers on home loans.
There's an increase in the demand for home loans because of a greater interest in home buying triggered by the Covid-19 pandemic, which has caused both work & education to shift to the homes, and also a downward trend in home prices.
Let's have a look at home loan rates among banks during the Indian festive period:
State Bank of India (SBI):
The SBI would be providing home loans to its customers at concessional interest rates in two stages. As per Umesh Kumar, SBI Chief General Manager (CGM), the first phase will be started from September 1 to October 31, however, the second phase will be operational from November 1 to December 31.
Customers willing to take a home loan during this period will be able to get it with a minimum floor rate of interest of 6.70%, irrespective of the loan amount.
Earlier a borrower taking a loan greater than Rs 75 lakh, had to pay a rate of interest of 7.15%. But the borrowers can now take a home loan for any amount at a rate as low as 6.70%, the SBI.
Apart from this, the country's largest public lender has also waived off processing fees and occupation-linked interest premiums. SBI has removed this difference between a salaried and a non-salaried borrower. Now, there's no occupation-linked interest premium being charged to prospective borrowers.
Punjab National Bank (PNB):
The PNB has also cut the interest rate on home loans above Rs 50 lakh by 0.50% to 6.60%. The home loan rates are lowest among public sector banks, the PNB said.
Furthermore, the bank said the rate will be linked with the applicant's credit score. Bank also informed that it had been already offering a full waiver of service charges/processing fees on a home loan, personal loan, vehicle loan, pension loans, myProperty loan, and gold loans under its 'Festival Bonanza Offer'.
Bank of Baroda (BoB):
State-owned Bank of Baroda is providing a waiver of 0.25% within the existing applicable rates for its home loans. The home loan rates start at 6.75%. The bank has also waived off processing fees on home loans.
Kotak Mahindra Bank:
Kotak Mahindra Bank has announced a 0.15 percentage point cut in its lending rate, offering mortgages from 6.50%. The private lender said the home loan at a rate of 6.50% is only a festive period offer and will remain active till November 8. This offer on home loans will be available for both fresh home loans and also to balance transfers, the bank added.
