State Bank of India, HDFC cut home loan rates to 8.4% for new applicants

Despite rising interest rates, leading home loan players State Bank of India and HDFC have announced discounted interest rates beginning at 8.4 per cent to new customers as part of their festive offerings.

SBI in a statement said it crossed Rs 6-trillion Assets Under Management (AUM) in residential home loans as of September 30, 2022. It had crossed Rs 5 trillion in January 2021. The lender said it was offering a discount of up to 25 bps on interest rate to new home loan borrowers, making the entry level rate at 8.4 per cent and the offer will run up to January 31, 2023.

The interest rate rebate will also apply to balance transfer cases aka takeover of existing home loans for peer lenders — banks and finance companies. The bank has also waived processing fees on home loans till January 31, 2023. The home loan rates are linked to credit score, meaning those with the best score will get the lowest possible rate.

SBI in a statement said it aimed to make home loans affordable for prospective buyers amidst the ongoing festive season. As a part of the festive bonanza, the bank will also offer a concession of up to 0.15 per cent on top-up loans, and 0.30 per cent on loans against property.

On becoming the first bank to reach the milestone Rs 6 trillion AUM, Dinesh Khara, SBI chairman, said over 2.8 million families have chosen to be their partner in the home-ownership journey. “A series of process and digital initiatives over the past few years played a crucial role in the journey to the Rs 6-trillion mark,” he said.

Its home loan portfolio grew by 13.77 per cent year on year to Rs 5.75 trillion at the end of June 2022. So, the public sector lender added loans worth Rs 25,000 crore in the second quarter ended September 2022. The bank aims to reach Rs 7-trillion mark for housing loan portfolio by September 2023, SBI officials said.

Meanwhile, the largest pure-play mortgage player, HDFC, which is awaiting its merger with its banking subsidiary HDFC Bank, said it was also offering discounted interest rates to new borrowers to the tune of 20 bps, or at 8.4 per cent.

According to HDFC website, the festive offer is valid up to November 30, and the low rate will be applicable to those borrowers who have a minimum credit score of 750.

(With inputs from PTI)