Mortgage Interest Rates: SBI and Kotak Cut Mortgage Rates to New Lows | Business News in India
SBI now offers home loans of up to Rs 75 lakh for as little as 6.7% (to female salaried borrowers) – the cheapest rate ever offered by the bank. SBI also continues to waive processing fees on all home loan applications. Kotak Mahindra Bank said it will offer home loans at rates starting at 6.65% for new purchases and balance transfers – also its lowest rate on record.
Home loans are the only engines of credit growth for banks, and lenders expect to jump last month as some of the programs offered by state authorities, such as stamp duty easing , end in March. While Kotak BankSBI’s rate is lower than SBI’s, it has a much smaller distribution footprint compared to the country’s largest bank, and is a relatively smaller player in mortgage lending.
“The previous best rate was 6.8%, and now it’s 6.7%. Previously there were three slabs, one of which was for loans up to Rs 30 lakh. Now we have a rate for loans up to Rs 75 lakh and another for larger loans, ”said SBI (retail) deputy director Saloni Narayan.
“A person with a credit score of 775 will get 6.8% home loans. If they get the loan through Yono, there is an additional 5 basis point discount. If the borrower is a woman, the rate will still be 5 basis points lower at 6.7%, ”she said. These rates are applicable to salaried borrowers, and there is a small premium for non-salaried borrowers.
SBI announced its offer the day it passed the Rs 1 lakh-crore disbursement milestone in FY21. The total mortgage portfolio was Rs 5 lakh crore as of January 31st. “We should end the year at Rs 5.12 lakh crore. Year by year we have increased by 10% and the number of loans disbursed month by month has increased with up to 1,300 proposals being processed per day, ”added Narayan.
The bank plans to increase mortgage disbursement by reducing the current turnaround time to five days when there is a link with a builder, and also reducing the timeframe to 12 days when there is no. such link.
“We are rolling out a retail loan management system next month and improving the strength of loan research teams,” said Narayan. She added that the bank is taking the omnichannel route to distribute home loans by giving customers the option to apply for loans through missed calls, through branches, online or through representatives.