SBI cut its interest rates linked to base rate by 30 basis points from 8.95% to 8.65 which will provide cheaper rates to over 80 lakh customers. The new rates are effective from January 1st 2018. SBI also cuts the BPLR (Benchmark Prime Lending Rate) by 30 basis points from 13.7% to 13.4%. This move comes after SBI recently announced a waiver on home loan processing fees till March 31, 2018.
The rate cut is not likely to benefit some of the more recent customers whose loans are linked to MCLR which currently stands between 7.7% – 8.1%. In 2016, many of the banks moved to MCLR as the basis as opposed to base rate. For the customers who may enjoy the base rate cut, they will see their EMI go down from Rs. 897 per every 1 lakh INR to Rs. 877.
It is widely expected that many of the other leading national banks will follow SBI’s lead and revise their lending rates. With estimates of over 30% loans being linked to base rate, such a move will have a positive effect for many home owners.
Our advice for SBI homeowners who are still on a base rate plan for their home loan is to get their loan rate revised or switch to the MCLR schema. If you are a non SBI home owner still on a base rate plan, we recommend moving your home loan to the MCLR schema.