SBI increases fixed home loan rates

By Our Banking Bureau | 31 Aug 2004

Mumbai: State Bank of India, yesterday announced a 25 to 50 basis points hike in its fixed home loan rates with immediate effect. The floating rates remain unchanged for now.

A K Purwar, SBI chairman said that it was not a big hike in rates. "We did it to stabilise the home loan market. Some banks have already done it. We are in line with market trend."

According to the revised rates, housing loans with a maturity of up to five years will now cost 8 per cent as against the existing 7.75 per cent. Loans with a maturity of 5-15 years, will carry the new rate of 8.75 per cent (8.25 per cent) and for 15-20 years the new rate is 9 per cent (8.50 per cent).

The bank has also decided to extend a option to its home loan borrowers, of making a switch over from their present floating rate loans to fixed rate loans, subject to a one-time payment of a 2.75 per cent fee.