The Indian real estate sector is all set to take a turn for good times in 2021. To encourage homebuyers ahead of the festive season, the State Bank of India (SBI) yesterday announced a sharp cut in lending rates.
The bank has reduced the home loan interest rates to 6.7% for any loan amount. Interestingly, this is the first time a bank is offering home loans at a uniform rate. The same interest rate will also be applicable for those who are planning to transfer their home loan from other banks to the State Bank of India.
This astute decision is expected to infuse positive sentiments in the realty market that has been struggling to get back on track for quite some time now.
Explaining the same, Anuj Puri, Chairman, ANAROCK Group said, “This is an extremely competitive move that virtually negates all the previous limitations which applied to special home loan interest rates. Instead of focusing on just budget housing, this new interest rate is genuinely democratic as buyers from any budget bandwidth will benefit.”
Latest ANAROCK research reveals that the highest demand is currently in the premium segment, where properties are priced Rs 80 Lakh and above. This is primarily the result of homes now doubling as offices and e-learning centres.
“This lending rate will also not restrict which cities will benefit from it – in previous concessional rates limited to budget housing, only tier 2 and tier 3 cities could benefit. With this democratised interest rate, SBI also addresses the huge housing demand in the metros. This move is aptly timed, coinciding with the beginning of the festive season,” he added.
Additionally, the lender also announced to waive off the processing fee. “Waiving of processing fees and occupation-linked interest premium are added levels of savings. Cumulatively, this package is the most compellingly attractive offering ever extended by a housing loan lender and it is reasonable to expect that other lenders will follow SBI’s footsteps to remain competitive,” Puri concluded.
Last week, private lender Kotak Mahindra Bank slashed its home loan rates by 15 bps to 6.5%. This special rate is limited to the festive season – beginning September 10 and ending November 8, 2021.