You Can Earn Rs 25 Lakh On Savings From Lower Home Loan Rates: SBI Chief

The interest rate cut on home loans offer significant savings to borrowers, the chairperson of State Bank of India (SBI), Arundhati Bhattacharya, said on Monday.

Giving an illustration, Ms Bhattacharya said that a person can save Rs 2,333 per month on 30-year, Rs 50 lakh home loan at the revised rates of 8.6 per cent.

Calculated on a yearly basis, the savings go up to Rs 27,996 and over the period of 30 years, the total savings go up to Rs 8.39 lakh, she said.

If this amount saved on lower EMIs is invested in a recurring deposit (@6.5 per cent) over the 30-year period, it will fetch Rs 25.80 lakh, the SBI chairperson said.

The country's largest bank on Monday sharply cut its lending rate, following "unprecedented" surge in deposits following the notes ban.

SBI has brought down the home loan rate (floating) to 8.60 per cent for new women borrowers and to 8.65 per cent for others on loans up to Rs 75 lakh. Earlier, the bank had charged an interest rate of 9.25 per cent for women borrowers and 9.30 per cent from others.

SBI has also come out with a new loan in which it will offer home loans up to Rs 30 lakh at 8.50 per cent. Under this scheme, the interest rate for the first two years will be fixed and thereafter linked to floating rate.

The SBI chairperson said that the bank in the 50-day period for deposit of old notes has been able to garner one and a half times deposits as that of the whole nine-month period, from January to September.

The SBI chairperson also said that the customers locked into higher rates in older loans can avail the lower rates by paying a one-time fee.