In news that will bring huge cheer to many borrowers, State Bank of India (SBI), has cut its home loan rate to the lowest level in six years. The country’s largest public sector lender has cut its home loan rate to 9.1%. The rate cut comes as part of a festive scheme by SBI. Under the new scheme, home loans for women, or loans with women as co-borrowers, will be available for 20bps above the benchmark rate. This implies a rate of 9.1%. A rate of 9.15% will be applicable for other borrowers. These rates will be valid for loans sanctioned in November and December this year, and where disbursement is taking place in a month. Adding to the good news, the bank will also waive off all processing fees.

 SBI MD Rajnish Kumar said  “The rate cut will bring down the equated monthly instalment on a Rs 50-lakh loan by Rs 542 per month. Since March, the EMI has come down by over Rs 1,500.” According to the report, SBI’s cheapest home loans are now 20bps lower than ICICI Bank and HDFC’s cheapest home loan rate of 9.3%, with this rate reduction.

Last week, SBI reduced its benchmark rates by 15 basis points. ICICI Bank also reduced its benchmark rate by 10 basis points. The announcements come after repeated displeasure shown by the regulator for not passing on the benefits of cuts to borrowers and give a boost to the sagging economic growth.

SBI has kept the overnight MCLR, which is the most aggressive offering, at 8.65 per cent, while the one month is at 8.75 per cent. Under the revised rate structure, the one-year MCLR —which is used for calculating the rate of interest on home loans — will come down to 8.95 per cent.