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INDIA BUSINESS WORLD - October 1st October 15th 2008
HOME LOANS ABOVE RS 75 LAKH TO GET DEARER
Be ready to pay higher interest on your home loan if you are planning to acquire a property priced close to a crore. Banks have started increasing home loan rates for large borrowers by 25 to 50 basis points. Earlier, banks had only two slabs for home loans –– up to Rs 30 lakh and above Rs 30 lakh.
Some banks have now introduced a third slab that covers borrowings over Rs 75 lakh. For instance, country’s largest lender the State Bank of India (SBI) is charging 12.50% for home loans of over Rs 75 lakh against 12.25% for loans between Rs 30 lakh to Rs 75 lakh and 11% for loans up to Rs 30 lakh. The new rates have been made effective from last month.
“The asset and liability committee (ALCO) of the bank has decided to introduce an additional amount tier for home loan borrowers considering the fact that borrowers of these loans mainly are the high net worth individuals (HNIs) and are in a position to pay the additional amount,” an official in SBI said from Mumbai. He, however, added that the higher rates are applicable only in case the loan duration is between 15-25 years and it would not be applicable for loans of shorter duration.
A circular in this regard has been sent to all the branches of SBI. The change in slab would be applicable on all the schemes of floating rate home loans. The increased rates are applicable to non-resident Indian (NRI) borrowers as well.
This is the second time since August that SBI has revised the home loan rates. In fact, finance minister P Chidambaram had asked all the bankers not to interfere with the priority sector home loan (loans up to Rs 30 lakh), but there was no specific direction with regard to loans beyond that.
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