State-run Bank, Bank of India has slashed interest rates on home loans by 35 basis points and vehicle loans by 50 basis points (1%=100 points) ahead of the festive season.
Bank of India offers an interest rate on vehicle loans at 6.85% as compared to 7.35% earlier and home loans at 6.5% against earlier 6.85%.
The offer is applicable till December 31as a part of the festive offer. This special rate is available for customers who are seeking fresh new loans and transfer of loans. The one-time processing charge will also be forgone on home and vehicle loans till December 31, 2021.
SBI, the largest public sector bank, also reduced the home loan interest rate to 6.7%, irrespective of the loan amount. Earlier, the interest rate was 7.15% on loans above 75 lakhs.
PNB is offering home loans at an interest rate of 6.60%. There is a complete waiver on the processing and documentation fee.
Bank of Baroda has lowered the interest rates on home loans to 6.5% from 6.75%. It is offering the most competitive rate.
Yes Bank has lowered the home interest rates to 6.7%. It has also launched a special 90-day offer under which it will give an additional five basis points discount (6.65%) to salaried women home buyers.
Private lender Kotak Mahindra Bank has also lowered the interest rates on home loans to 6.5%.
ICICI bank is providing home loans at 6.7% with a processing fee of Rs 1100.
Why are the housing loans falling?
- RBI has decided to continue with its accommodative stance policy approach, an easy monetary policy to inject money into the economy and increase liquidity.
- In the Bi-monthly Monetary Policy Statement, RBI kept the repo and reverse repo rate unchanged to 4% and 3.35%.
- The residential sales spurt up during the festive season.
- The home loan rates are at their all-time low and the property prices are also well priced, giving an advantage to homebuyers to invest in the real estate segment.
- The move to reduce home rates is encouraging and will increase the housing demand further. The segment is seeing a lot of first-time homebuyers, who were not able to invest previously due to the lockdown.