The increased lending rate by RBI has made the banks to hike the interest rates to the consumers, this has made it difficult for consumers to plan their investments and reckon the profitability out of their property investments.
State Bank of India has raised the loan interest to 11-12 percent for floating rate and additional 2 percent i.e. 13-14 percent for fixed rate. This used to be 6.75 – 9.5 near around 2 years back. With property rates increasing 300% a year and now interest rates nearly doubling the actual rates has made home loans not so attractive for consumers with average income levels.
Saturday, May 22, 2010
Monday, May 3, 2010
SBI Increases Interest Rates on Home Loan
State Bank of India (SBI), the largest bank in India and one of the leading players in the housing finance market, has raised interest rates on home loans. Although the bank will continue with its 8% teaser rate — which the SBI had introduced more than a year ago — for the first year, it has increased rates for the subsequent years, effective April 1. The hike in home loan rates by SBI was triggered by the recent increase in its cost of funds.
Till March 31, SBI had two schemes — The Easy Home Loan (up to Rs 50 lakh) and Advantage Home Loan (above Rs 50 lakh). ‘‘From April 1, both the schemes have been merged and extended for a month,’’ an SBI spokesperson confirmed to TOI. ‘‘The rates applicable for new loans sourced from April 1 till April 30 are 8% for the first year, 9% for the second and third years and floating rate at 1.75% below SBAR (SBI’s equivalent of prime lending rate, or PLR) thereafter,’’ the spokesperson added. So in effect, the home loan rates for the second and the third years have gone up by 50 basis points (100 basis points=1%), from 8.5% earlier to 9% now. While fourth year onwards, at the current structure, the interest rate will be at 10% per annum, since currently SBAR is at 11.75%. Earlier, from the fourth year onward, the floating rate was at 2.75% below the SBAR and the effective rate was 9%.
Under the new rate structure (assuming a 10% rate from the fourth year), on a 20-year loan of Rs 30 lakh, a customer would have to shell out about Rs 3.9 lakh over the tenor of the loan. Thus the effective rate that the customer would be paying over the 20-year period is 9.5%. Explaining the rationale for hiking rates on home loans, the SBI spokesperson said it mainly reflected ‘‘the increased cost of funds from April 1 stemming from the new methodology for paying interest in savings bank accounts on daily balances.’’ In April 2009, Reserve Bank of India (RBI) had mandated all the banks in India to move to a new methodology of calculating interest rates on savings bank accounts that would add interest on a daily basis. This is a significant departure from the earlier practice of calculating interest rate on minimum balance after the tenth of every month.
For sometime now, with the annual rate of food inflation hovering around 20% level and the yields on benchmark 10-year government securities around the 8% mark, bankers and home finance veterans were talking about the possibility of a hike in interest rate in the economy. And now with SBI, the country’s largest bank, hiking housing loan rates, industry players are almost sure that interest rates have bottomed out in the current cycle. Lately a number of banks and financial institutions, including the country’s home loan pioneer HDFC, have withdrawn their home loan products at 8% or at a slightly lower rates, and are moving to a more sustainable interest rate structure.
Till March 31, SBI had two schemes — The Easy Home Loan (up to Rs 50 lakh) and Advantage Home Loan (above Rs 50 lakh). ‘‘From April 1, both the schemes have been merged and extended for a month,’’ an SBI spokesperson confirmed to TOI. ‘‘The rates applicable for new loans sourced from April 1 till April 30 are 8% for the first year, 9% for the second and third years and floating rate at 1.75% below SBAR (SBI’s equivalent of prime lending rate, or PLR) thereafter,’’ the spokesperson added. So in effect, the home loan rates for the second and the third years have gone up by 50 basis points (100 basis points=1%), from 8.5% earlier to 9% now. While fourth year onwards, at the current structure, the interest rate will be at 10% per annum, since currently SBAR is at 11.75%. Earlier, from the fourth year onward, the floating rate was at 2.75% below the SBAR and the effective rate was 9%.
Under the new rate structure (assuming a 10% rate from the fourth year), on a 20-year loan of Rs 30 lakh, a customer would have to shell out about Rs 3.9 lakh over the tenor of the loan. Thus the effective rate that the customer would be paying over the 20-year period is 9.5%. Explaining the rationale for hiking rates on home loans, the SBI spokesperson said it mainly reflected ‘‘the increased cost of funds from April 1 stemming from the new methodology for paying interest in savings bank accounts on daily balances.’’ In April 2009, Reserve Bank of India (RBI) had mandated all the banks in India to move to a new methodology of calculating interest rates on savings bank accounts that would add interest on a daily basis. This is a significant departure from the earlier practice of calculating interest rate on minimum balance after the tenth of every month.
For sometime now, with the annual rate of food inflation hovering around 20% level and the yields on benchmark 10-year government securities around the 8% mark, bankers and home finance veterans were talking about the possibility of a hike in interest rate in the economy. And now with SBI, the country’s largest bank, hiking housing loan rates, industry players are almost sure that interest rates have bottomed out in the current cycle. Lately a number of banks and financial institutions, including the country’s home loan pioneer HDFC, have withdrawn their home loan products at 8% or at a slightly lower rates, and are moving to a more sustainable interest rate structure.
Sunday, May 2, 2010
Sbi Offering Low Loan Interest Rate Home Loans
Many people are now investing in properties and are buying new home. The cheap and easy SBI housing loans makes it possible for them to get low SBI home loan interest rate, which enables them to invest in properties. People can use the SBI home loan EMI calculator and then apply for the SBI housing loans, which may be available to them.
SBI has introduced very low SBI home loan interest rate, which can easily be paid by the customer. The loan applicant can apply for different types of SBI housing loans and choose the SBI home loan interest rate that is suitable for him. He can take the help of the SBI home loan EMI calculator that can help him determine the percentage of loan he can apply for.
The SBI home loan EMI calculator is the perfect way to know what kind of SBI housing loans you should apply for. It also allows the loan applicant to calculate the SBI home loan interest rate and know the amount of EMI he would have to pay on the loan. You can just fill in your capital amount and saving, which would help you get the loan amount you can apply for. They can also mention whether they want to apply for fixed SBI home loan interest rate or for the one with floating interest rate for SBI housing loans. This can help you arrive at the loan amount that may be granted to you. Once you get the loan amount through the SBI home loan EMI calculator, you can proceed ahead and fill in the SBI housing loans application.
There are different types of schemes available on SBI housing loans. One can get the information about them online and thus make their decision. This is one of the best ways to know about the home loans offered by the bank. You can use the SBI home loan EMI calculator as well, which is available on the site and calculate your loan amount as well.
People now have the ease to download and fill the SBI housing loans application online. They can visit sbi-home-loan.com to do the same. The site has information about the SBI home loan interest rate and about the ongoing schemes and offers as well. Thus, you can know everything and anything about home loans and apply for the same.
SBI has introduced very low SBI home loan interest rate, which can easily be paid by the customer. The loan applicant can apply for different types of SBI housing loans and choose the SBI home loan interest rate that is suitable for him. He can take the help of the SBI home loan EMI calculator that can help him determine the percentage of loan he can apply for.
The SBI home loan EMI calculator is the perfect way to know what kind of SBI housing loans you should apply for. It also allows the loan applicant to calculate the SBI home loan interest rate and know the amount of EMI he would have to pay on the loan. You can just fill in your capital amount and saving, which would help you get the loan amount you can apply for. They can also mention whether they want to apply for fixed SBI home loan interest rate or for the one with floating interest rate for SBI housing loans. This can help you arrive at the loan amount that may be granted to you. Once you get the loan amount through the SBI home loan EMI calculator, you can proceed ahead and fill in the SBI housing loans application.
There are different types of schemes available on SBI housing loans. One can get the information about them online and thus make their decision. This is one of the best ways to know about the home loans offered by the bank. You can use the SBI home loan EMI calculator as well, which is available on the site and calculate your loan amount as well.
People now have the ease to download and fill the SBI housing loans application online. They can visit sbi-home-loan.com to do the same. The site has information about the SBI home loan interest rate and about the ongoing schemes and offers as well. Thus, you can know everything and anything about home loans and apply for the same.
Saturday, May 1, 2010
State Bank of India (SBI) Hikes Rates on Home Loans
State Bank of India (SBI), the largest bank in India and one of the leading players in the housing finance market, has raised interest rates on home loans. Although the bank will continue with its 8 per cent teaser rate — which the SBI had introduced more than a year ago — for the first year, it has increased rates for the subsequent years, effective April 1. The hike in home loan rates by SBI was triggered by the recent increase in its cost of funds.
Till March 31, SBI had two schemes — The Easy Home Loan (up to Rs 50 lakh) and Advantage Home Loan (above Rs 50 lakh). ‘‘From April 1, both the schemes have been merged and extended for a month,” an SBI spokesperson said. ‘‘The rates applicable for new loans sourced from April 1 till April 30 are 8 per cent for the first year, 9 per cent for the second and third years and floating rate at 1.75 per cent below SBAR (SBI’s equivalent of prime lending rate, or PLR) thereafter,” the spokesperson added.
So in effect, the home loan rates for the second and the third years have gone up by 50 basis points (100 basis points=1 per cent), from 8.5 per cent earlier to 9 per cent now. While fourth year onwards, at the current structure, the interest rate will be at 10 per cent per annum, since currently SBAR is at 11.75 per cent. Earlier, from the fourth year onward, the floating rate was at 2.75 per cent below the SBAR and the effective rate was 9 per cent.
Under the new rate structure (assuming a 10 per cent rate from the fourth year), on a 20-year loan of Rs 30 lakh, a customer would have to shell out about Rs 3.9 lakh over the tenor of the loan. Thus the effective rate that the customer would be paying over the 20-year period is 9.5 per cent.
Explaining the rationale for hiking rates on home loans, the SBI spokesperson said it mainly reflected ‘‘the increased cost of funds from April 1 stemming from the new methodology for paying interest in savings bank accounts on daily balances.” In April 2009, Reserve Bank of India (RBI) had mandated all the banks in India to move to a new methodology of calculating interest rates on savings bank accounts that would add interest on a daily basis. This is a significant departure from the earlier practice of calculating interest rate on minimum balance after the tenth of every month.
For sometime now, with the annual rate of food inflation hovering around 20 per cent level and the yields on benchmark 10-year government securities around the 8 per cent mark, bankers and home finance veterans were talking about the possibility of a hike in interest rate in the economy. And now with SBI, the country’s largest bank, hiking housing loan rates, industry players are almost sure that interest rates have bottomed out in the current cycle.
Lately a number of banks and financial institutions, including the country’s home loan pioneer HDFC, have withdrawn their home loan products at 8 per cent or at a slightly lower rates, and are moving to a more sustainable interest rate structure.
Till March 31, SBI had two schemes — The Easy Home Loan (up to Rs 50 lakh) and Advantage Home Loan (above Rs 50 lakh). ‘‘From April 1, both the schemes have been merged and extended for a month,” an SBI spokesperson said. ‘‘The rates applicable for new loans sourced from April 1 till April 30 are 8 per cent for the first year, 9 per cent for the second and third years and floating rate at 1.75 per cent below SBAR (SBI’s equivalent of prime lending rate, or PLR) thereafter,” the spokesperson added.
So in effect, the home loan rates for the second and the third years have gone up by 50 basis points (100 basis points=1 per cent), from 8.5 per cent earlier to 9 per cent now. While fourth year onwards, at the current structure, the interest rate will be at 10 per cent per annum, since currently SBAR is at 11.75 per cent. Earlier, from the fourth year onward, the floating rate was at 2.75 per cent below the SBAR and the effective rate was 9 per cent.
Under the new rate structure (assuming a 10 per cent rate from the fourth year), on a 20-year loan of Rs 30 lakh, a customer would have to shell out about Rs 3.9 lakh over the tenor of the loan. Thus the effective rate that the customer would be paying over the 20-year period is 9.5 per cent.
Explaining the rationale for hiking rates on home loans, the SBI spokesperson said it mainly reflected ‘‘the increased cost of funds from April 1 stemming from the new methodology for paying interest in savings bank accounts on daily balances.” In April 2009, Reserve Bank of India (RBI) had mandated all the banks in India to move to a new methodology of calculating interest rates on savings bank accounts that would add interest on a daily basis. This is a significant departure from the earlier practice of calculating interest rate on minimum balance after the tenth of every month.
For sometime now, with the annual rate of food inflation hovering around 20 per cent level and the yields on benchmark 10-year government securities around the 8 per cent mark, bankers and home finance veterans were talking about the possibility of a hike in interest rate in the economy. And now with SBI, the country’s largest bank, hiking housing loan rates, industry players are almost sure that interest rates have bottomed out in the current cycle.
Lately a number of banks and financial institutions, including the country’s home loan pioneer HDFC, have withdrawn their home loan products at 8 per cent or at a slightly lower rates, and are moving to a more sustainable interest rate structure.
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