After the fourth time at a\nstretch interest rate cut in the country, the rate of interest on home loans\ndecreased. The decreased rate on home loan is truly a monsoon bonanza for the\nborrowers. It is a bad news for creditors but very good news for the customers\nseeking home loans to buy a new property and also for the existing home loan\ncustomers.<\/p>\n\n\n\n
The country\u2019s largest bank the State Bank of India stated that it is expecting the consideration of passing out the benefit of the repo-linked rate also to its existing borrowers of home loans. The State Bank of India had already introduced repo-linked interest rate for home loans<\/a><\/strong> from July onwards. The new customers are taking the advantage of the bank\u2019s lower policy rates.<\/p>\n\n\n\n Answering to ET\u2019s question\nwhether the advantage of repo-linked loans will be passed also to the existing\nborrowers, the SBI Chairman Rajnish Kumar said, \u201cWe are examining this.\u201d<\/p>\n\n\n\n In the year 2014, when\nbanks announced marginal-cost based lending rate every bank provided their\nexisting borrowers the option to switch over from base-rate linked loans to\nMCLR-linked loans. <\/p>\n\n\n\n At present, repo-linked lending rate (RLLR) of SBI is 5.40% which is a 2.25% mark-up over the repo rate. The current RLLR is 7.65%. There is a 40 basis points and 55 bps spread over the repo-linked lending rate. Therefore, the SBI customers can apply home loans at 8.05% or 8.20% per year. Also, do remember that a single basis point equals to one-hundredth of 1%.<\/p>\n\n\n\n <\/p> <\/ul><\/div>\n