State Bank Of India Home Loan Interest Rate (Updated on 18 Apr 2021)

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State Bank Of India

About SBI Home Loan

Particulars	Description
Type	Public Sector Bank
Industry	Banking & Financial Services
Founded in	2nd June 1956
Headquarter	Mumbai, Maharashtra, India
Owner	Government of India
Website	https://www.sbi.co.in/
Products	Retail Banking, Corporate Banking, Finance, Credit Cards, Insurance, Asset Management, Wealth Management & Loans

State Bank of India (SBI) Home Loans is the largest lender in India. It offers a variety of Home Loan Schemes to the customers to fulfil their dream of owning a home. It has already provided home loan to more than 30 Lakh families.

SBI provides home loan for different purposes such as for purchase, construction and extension of dwelling unit, for purchase of plot, for upgrading home, etc. SBI offers customised Home Loan solutions, best-in-class services and simplified loan process.

SBI Home Loan Interest Rates Updated on 18 Apr 2021

Particulars	Details
Interest Rate	For Women: 7.90% to 8.40% For Others: 7.95% to 8.45%
Processing Fee	0.35% of Loan Amount Min. Rs.2,000 to Max. Rs.10,000 (plus applicable tax)
Loan Amount	Customised
Loan Tenure	Up to 30 Years or upto the age of 70 years , whichever is earlier
Margin	10% to 25% of the loan amount
Pre-closure Charges	Nil
Part-Payment Charges	Nil
Security	Equitable | Registered Mortgage of the Property in question

Why SBI Home Loan?

1. SBI offers home loan at the most cost effective rates compared to the other banks
2. SBI provides a range of Home Loan Schemes designed for different needs of customers
3. It calculates the Interest on daily reducing basis which lowers the overall interest
4. It has a very low processing fee for Home Loan
5. It has no loan pre-closure or part payment charges
6. There are no hidden charges
7. No guarantor is required for applying for home loan
8. Wide network of SBI branches spread across India provides the customers easy access to its office
9. 24/7 helpline of SBI provides quick resolution of queries and timely assistance to the customers
10. It provides Flexible Repayment Options to the borrowers
11. SBI has been considered the "Most Preferred Home Loan Provider" in the AWAAZ consumer awards
12. SBI has been rated as the "Most Preferred Bank Award" as per the survey conducted by the TV 18 which was in association with AC Nielsen-ORG Marg in across India with the focus of 21 cities
13. Moreover, SBI is the biggest bank in India hence it has a strong factor of trust among the people

Purpose of SBI Home Loan

1. For construction of house| flat
2. For purchase of built house|flat
3. For purchase of under construction house|flat from Housing Boards| Development Authorities| Co-operative Societies| Approved Private Builders| Projects
4. For carrying out Additions to the house/flat
5. For carrying out repairs| renovation | alterations| cost of furnishing to the house/flat
6. For meeting cost escalation in the cases of under-construction flats to existing Housing Loan borrowers
7. For purchase of land|plot for house building

Margin or Loan to Value Ratio (LTV) Ratio

Loan Amount	Margin	LTV Ratio
Up to Rs. 20 lakhs	10%	90%
Above Rs. 20 lakhs and upto Rs. 75 lakhs	20%	80%
Above Rs. 75 lakhs	30%	70%

Eligibility Criteria of SBI Home Loan

Basis	Salaried Customers	Non Salaried Customers
Age	Minimum 18 years & Maximum 70 Years	Minimum 18 years & Maximum 70 Years
Income	Annual income must be atleast Rs.1.2 lakhs	Annual income must be atleast Rs 2 lakhs
Job/ Business Experience	1 Year	2 Years
Age of Co-applicant	Minimum 18 years	Minimum 18 years

Documents Required for SBI Home Loan

Documents Required for Guarantor

• 2 passport size colour photographs
• Identity Proof (Voter ID Card/ Passport/ Driving License/ PAN Card)
• Address Proof (Telephone Bill/ Electricity Bill/ Property Tax Receipt/ Passport/ Voter ID Card)
• Signature Identification from present banker
• Assets and liabilities Statement

Fees & Charges on SBI Home Loan

Category	Fee & Charges
Processing Fee	0.35% of Loan Amount Min. Rs.2,000 to Max. Rs.10,000 (plus applicable tax)
Pre-Sanction Fee	Advocate's fee for property search and title investigation report Valuer's fee for valuation report
Post-Sanction Fee	Stamp duty payable for Loan agreement and mortgage Property insurance premium CERSAI Registration Fee of Rs 50 + GST up to Rs 5 Lakh limit; and Rs 100 + GST for limits above Rs 5 Lakh
Switch Over Fee	Nil
Balance Transfer Fee	Nil up to 31.12.2018
Bounced cheque/ECS or SI dishonours charges	Rs. 250 on each such transaction

SBI Marginal Cost of Funds Based Lending Rate (MCLR) with effect from 10.01.2021

Tenor	MCLR (In %)
Overnight	6.65
1 Month	6.65
3 Month	6.65
6 Month	6.95
1 Year	7.00
2 Years	7.20
3 Years	7.30

Loan Amount of SBI Home Loan

Loan offered to the borrower is completely customised as per the requirement and the eligibility criteria of the customer. The value of loan depends upon applicant's income, repaying capacity, age, assets and liabilities, credit score, tenure of the loan, cost of the proposed property, previous credit history.

Loan of even upto Rs. 50 crores is also offered under select schemes but as such there is no maximum cap on the loan amount, finally it is at the descrition of the bank.

Margin of SBI Home Loan

Margin for SBI Home loan ranges from 10% to 25% of the loan amount. It depends upon the scheme and loan amount availed by the borrower.

Repayment of SBI Home Loan

The repayment of SBI Home Loan can be done in Maximum 30 years or upto 70 years of the age of borrower, whichever is earlier.

Security of SBI Home Loan

Being it a secured loan, the borrower is required to do Equitable | Registered Mortgage of the Property in question in favour of the bank.

SBI Home Loan Schemes

Sr No	Scheme	Brief Description
1	SBI Regular Home Loan	Regular and most demanding scheme
2	SBI Maxgain Home Loan	Home Loan is taken as Overdraft
3	SBI Home Top-Up Loan	Borrow amount over and above home loan amount
4	SBI Balance Transfer of Home Loan	Transfer home loan from other institution to SBI
5	SBI NRI Home Loan	NRIs and PIOs can get home loan
6	SBI Flexipay Home Loan	Exclusively designed for salaried to get higher loan
7	SBI Privilege Home Loan	Exclusively designed for government employees
8	SBI Shaurya Home Loan	Dedicated to Indian Army and Defence Personnel
9	SBI Pre-Approved Home Loan (PAL)	Sanction of loan limit before finalizing property
10	SBI Realty Home Loan	Exclusively to purchase a plot for construction
11	SBI Bridge Home Loan	Upgrade home
12	SBI Hamara Ghar	Fixed interest rate for first 2 years
13	SBI Tribal Plus	Especially for customers in Hilly or Tribal areas
14	SBI Earnest Money Deposit (EMD)	Booking of plot or house being sold by Govt Housing agencies
15	SBI Reverse Mortgage Loan	Loan against mortgage of residential property
16	SBI CRE (Commercial Real Estate) Home Loan	Loan to customers who own at least 2 houses
17	Pradhan Mantri Awas Yojana (PMAY)	Subsidised home loan for eligible urban beneficiaries

(1) SBI Regular Home Loan: This is a regular scheme. This is most demanding scheme too. Maximum number of customers opt for home loan under this scheme only.

Important Features

1. Maximum Loan Amount: No cap
2. Maximum Tenure: Up to 30 Years or upto the age of 70 years , whichever is earlier
3. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	7.90%	7.95%
   Above 30 Lakhs to 75 Lakhs	8.15%	8.20%
   Above 75 Lakhs	8.25%	8.30%

4. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.05%	8.10%
   Above 30 Lakhs to 75 Lakhs	8.30%	8.35%
   Above 75 Lakhs	8.40%	8.45%

(2)SBI Maxgain Home Loan: Whenever Home Loan is taken as Overdraft, it is called Maxgain.

Important Features

1. Minimum Loan Amount: Rs 20 lakhs
2. Maximum Loan Amount: Rs 3 crores
3. Interest on home loan can be reduced with the help of this scheme
4. Maxgain home loan account is opened by SBI for the customer
5. Loan amount is provided as overdraft
6. Customer has flexibility to withdraw or deposit the amount anytime in this account
7. Surplus amount deposited by the customer is considered as loan repayment, therefore reduces the outstanding loan amount and interest is reduced as well
8. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Above 20 Lakhs to 30 Lakhs	8.15%	8.20%
   Above 30 Lakhs to 75 Lakhs	8.40%	8.45%
   Above 75 Lakhs to 3 crore	8.50%	8.55%

9. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Above 20 Lakhs to 30 Lakhs	8.30%	8.35%
   Above 30 Lakhs to 75 Lakhs	8.55%	8.60%
   Above 75 Lakhs to 3 crore	8.65%	8.70%

(3) SBI Home Top-Up Loan: SBI offers customers to borrow certain amount over and above their home loan amount.

Important Features

1. Customer should already have a SBI Home Loan Account
2. It can be availed for any personal purpose
3. The interest rates are much lower than usual personal loan interest rates.
4. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 20 Lakhs	8.35%	8.35%
   Above 20 Lakhs to 1 Crore	8.55%	8.55%
   Above 1 Crore to 2 Crores	8.75%	8.75%
   Above 2 Crores to 5 Crores	9.20%	9.20%
   Above 5 Crores	10.40%	10.40%

5. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 20 Lakhs	8.50%	8.50%
   Above 20 Lakhs to 1 Crore	8.70%	8.70%
   Above 1 Crore to 2 Crores	8.90%	8.90%
   Above 2 Crores to 5 Crores	9.35%	9.35%
   Above 5 Crores	10.55%	10.55%

(4) SBI Balance Transfer of Home Loan: This scheme enables a customer to transfer home loan from any other institution to SBI.

Important Features

1. Customer should satisfy the eligibility criteria for availing Home Loan as per SBI's instruction
2. Customer has serviced interest and/or instalment of the existing loan regularly, as per the original terms of sanction
3. Customer should have valid documents evidencing the title to the house/ flat
4. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	7.90%	7.95%
   Above 30 Lakhs to 75 Lakhs	8.15%	8.20%
   Above 75 Lakhs	8.25%	8.30%

5. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.05%	8.10%
   Above 30 Lakhs to 75 Lakhs	8.30%	8.35%
   Above 75 Lakhs	8.40%	8.45%

(5) SBI NRI Home Loan: This scheme enables NRIs (Non Resident Indians) and PIO (People of Indian Origin) to get home loan.

Important Features

1. Minimum Loan Amount: Rs 3 lakhs
2. Maximum Loan Amount: No cap, it depends on the applicant's ability to repay the loan and his income
3. Customer's status should be an NRI (Non Resident Indian) or PIO (People of Indian Origin)
4. Customer should satisfy the eligibility criteria for availing Home Loan as per SBI's instruction
5. Customer should earn a regular income
6. Customer's minimum employment period (in India or abroad) should be more than 2 years
7. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	7.90%	7.95%
   Above 30 Lakhs to 75 Lakhs	8.15%	8.20%
   Above 75 Lakhs	8.25%	8.30%

8. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.05%	8.10%
   Above 30 Lakhs to 75 Lakhs	8.30%	8.35%
   Above 75 Lakhs	8.40%	8.45%

(6) SBI Flexipay Home Loan: This scheme offers a higher loan amount exclusively for the salaried borrowers

Important Features

1. Minimum Loan Amount: Rs 20 lakhs
2. Maximum Loan Amount: No cap
3. Maximum Age: 45 years, to apply for loan, and upto age of 70 years for repayment
4. This scheme is suitable for young earners
5. Customer has the option to pay only interest during the moratorium (pre-EMI) period
6. EMIs will be stepped-up during the subsequent years
7. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	7.90%	7.95%
   Above 30 Lakhs to 75 Lakhs	8.15%	8.20%
   Above 75 Lakhs	8.25%	8.30%

(7) SBI Privilege Home Loan: This scheme is exclusively designed for government employees.

Important Features

1. Minimum Loan Amount: Rs 10 lakhs
2. Maximum Loan Amount: 50 crore
3. Customer should be a government employee i.e. employee of Central or State Government which includes PSBs, PSUs of Central Government and other individuals with pensionable service
4. Only Term Loans are provided and Overdraft (Maxgain) facility is not provided
5. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.70%-8.80%	8.75%-8.85%
   Above 30 Lakhs to 75 Lakhs	8.90%-9.00%	8.95%-9.05%
   Above 75 Lakhs	9.00%-9.10%	9.05%-9.15%

6. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.85%-8.95%	8.90%-9.00%
   Above 30 Lakhs to 75 Lakhs	9.05%-9.15%	9.10%-9.20%
   Above 75 Lakhs	9.15%-9.25%	9.20%-9.35%

(8) SBI Shaurya Home Loan: This scheme is exclusively dedicated to the Army and Defence Personnel of the nation.

Important Features

1. Minimum Loan Amount: Rs 10 lakhs
2. Maximum Loan Amount: 50 crore
3. Customer should be a defence employee
4. It offers lower interest rates than other home loan schemes of SBI
5. Customer gets longer repayment period
6. Only Term Loans are provided and Overdraft (Maxgain) facility is not provided
7. Interest Rate:

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.70%-8.80%	8.75%-8.85%
   Above 30 Lakhs to 75 Lakhs	8.90%-9.00%	8.95%-9.05%
   Above 75 Lakhs	9.00%-9.10%	9.05%-9.15%

(9) SBI Pre-Approved Home Loan (PAL): This scheme provides sanction of Home Loan limits to the customers before finalization of the property.

Important Features

1. Minimum Loan Amount: Rs 10 lakhs
2. Maximum Loan Amount: No cap
3. Customer can negotiate with the Builder/ Seller confidently as he knows his Home Loan limits in advance
4. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.70%-8.80%	8.75%-8.85%
   Above 30 Lakhs to 75 Lakhs	8.90%-9.00%	8.95%-9.05%
   Above 75 Lakhs	9.00%-9.10%	9.05%-9.15%

5. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.85%-8.95%	8.90%-9.00%
   Above 30 Lakhs to 75 Lakhs	9.05%-9.15%	9.10%-9.20%
   Above 75 Lakhs	9.15%-9.25%	9.20%-9.35%

(10) SBI Realty Home Loan: This scheme provides customer to purchase a plot for construction of a dwelling unit.

Important Features

1. Maximum Loan Amount: 15 crore
2. Maximum Loan Tenure: 10 years
3. Interest Concession for Women Borrowers
4. Construction of the house must be within 5 years from date of loan sanction
5. Customer can also avail another Home Loan for construction of house from SBI
6. Interest Rate (for first 5 years):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 30 Lakhs	8.60%	8.65%
   Above 30 Lakhs to 75 Lakhs	8.70%	8.75%
   Above 75 Lakhs	8.80%	8.85%

7. An additional premium of 395 bps will be added to the final rate in case the construction of house is not completed and a completion certificate is not submitted by borrowers within the stipulated period of 5 years from the date of first disbursement

(11) SBI Bridge Home Loan: This scheme provides customer to upgrade their homes.

Important Features

1. Minimum Loan Amount: Rs 20 lakhs
2. Maximum Loan Amount: 2 crore
3. Maximum Loan Tenure: 2 years
4. Upgradation may be for constructing bigger home or constructing home to a better location by selling off an existing home
5. Interest Rate:

   Loan Tenure	Interest Rate p.a.
   First Year	10.35%
   Second Year	11.35%

(12) SBI Hamara Ghar: This scheme provides customer fixed interest rate for initial 2 years.

Important Features

1. Maximum Loan Amount: 30 lakhs
2. It offers fixed interest rate for initial 2 years
3. Interest Rate (for salaried customers):

   Loan Tenure	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   First 2 years	8.45%	8.50%
   Rest of the tenure	Linked to prevailing 1 year MCLR rate	Linked to prevailing 1 year MCLR rate

4. Interest Rate (for non-salaried customers):

   Loan Tenure	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   First 2 years	8.60%	8.65%
   Rest of the tenure	Linked to prevailing 1 year MCLR rate	Linked to prevailing 1 year MCLR rate

(13) SBI Tribal Plus: This scheme is designed especially for customers in Hilly/ Tribal areas.

Important Features

1. Maximum Loan Amount: 10 lakhs
2. Maximum Loan Tenure: 15 years
3. Loan amount can also be used for repair/ renovation/ extension of an existing house or flat
4. Interest Rate (for salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 10 Lakhs	8.80%-8.90%	8.85%-8.95%

5. Interest Rate (for non-salaried customers):

   Loan Amount	Interest Rate (Women) p.a.	Interest Rate (Others) p.a.
   Upto 10 Lakhs	8.95%-9.05%	9.00%-9.10%

(14) SBI Earnest Money Deposit (EMD): This scheme is for the customers who want a loan for booking of residential plots/ built-up houses being sold by Government Housing agencies like Urban Development Authorities like PUDA, HUDA and Housing.

Important Features

1. Maximum Loan Amount: 10 lakhs
2. Maximum Loan Tenure: 12 months
3. Interest rate: 11.30% p.a.
4. Short term loans of up to 100% of application money
5. No minimum income criterion
6. Loan Tenure: In cases of successful allotment lump sum repayment is to be made

(15) SBI Reverse Mortgage Loan:This loan is provided to customer against mortgage of his / their residential house property. This scheme is especially designed for aged people such as senior citizens.

Important Features

1. Maximum Loan Amount: 3 lakhs
2. Maximum Loan Amount: 1 crore
3. Minimum Age: 60 years when single borrower. In case of joint borrowers, spouse's age should be more than 58 years
4. Maximum Loan Tenure: 10-15 years, depends on age of borrowers
5. Interest Rate:

   Category of the Borrower	Interest Rate p.a.
   SBI Pensioners	8.90%
   Others	9.90%

6. No need to service the loan during borrower's lifetime
7. Beneficial for senior citizens who do not have adequate income to support themselves

(16) SBI CRE (Commercial Real Estate) Home Loan:This loan is provided to customers who own at least 2 houses and seek loan for owning their next home.

Important Features

1. Loan is available as Overdraft (Maxgain) also
2. Interest Concession for Women Borrowers
3. Maximum houses under CRE Home Loan: 3
4. Maximum Number of Home Loan: 5
5. Interest Rate: A premium of 50 bps over and above the interest rate applicable to Home Loan will be charged.

(17) Pradhan Mantri Awas Yojana (PMAY): Housing for All (Urban)

PMAY is an affordable housing scheme for providing houses to all the eligible beneficiaries by 2022. "Housing for All" Mission for urban area will be implemented during 2015-2022. Credit linked subsidy (CLSS) will be provided on home loans taken by eligible urban beneficiaries for acquisition or construction of house.

It is provided in 2 categories:

1. CLSS - EWS / LIG
2. CLSS (MIG-I/II)

Credit Linked Subsidy Scheme (CLSS) EWS / LIG

Credit linked interest subsidy at 6.50% will be provided to the eligible borrowers in EWS/LIG category for 20 years or actual tenure of the home loan, whichever is lower, as per the guidelines of Government of India.

Important Features:

1. Applicants must belong to LIG & EWS categories
2. Maximum Loan Tenure: 20 Years
3. Interest subsidy: 6.50 % p.a.
4. House should either in the sole name of the female family member or joint ownership of husband with the wife.
5. If loan is taken for construction of house on an existing plot or extension/ renovation of existing house, then above condition mentioned in point 4 is not applicable
6. The beneficiary family should not own an all-weather dwelling unit either in his/ her name or in the name of any member of his/ her family in any part of India.
7. Max carpet area 30 sq. mts. for EWS and 60 sq. mts. for LIG categories

Who is a person belonging to EWS (Economically Weaker Sections) category?

EWS beneficiaries have an annual income upto Rs. 3.00 lakhs.

Who is a person belonging to LIG(Low Income Group) category?

LIG beneficiaries have an annual income between Rs. 3.00 lakhs to Rs. 6.00 lakhs.

Credit Linked Subsidy Scheme (CLSS) - MIG

Credit linked interest subsidy at 4% or 3% will be provided to the eligible borrowers in MIG-I/ MIG-II category up to 31.03.2019, as per the guidelines of Government of India. CLSS-MIG had been implemented initially for a period of one year i.e. from 01.01.2017 up to 31.12.2017, but has now been extended up to 31.03.2019.

Important Features:

1. Applicants must belong to MIG-I & MIG-II categories
2. Maximum Loan Tenure: Upto 30 years
3. Maximum Tenure for subsidy: Upto 20 years or actual tenure of the home loan, whichever is lower
4. Interest subsidy of 4% for the loan amount up to Rs 9 lakhs for MIG-I segment.
5. Interest subsidy of 3% for the loan amount up to Rs 12 lakhs for MIG-I segment.
6. House can be in the name of either of the spouses or joint ownership of husband with the wife.
7. The beneficiary family should not own an all-weather dwelling unit either in his/ her name or in the name of any member of his/ her family in any part of India.
8. Max carpet area 120 sq. mts. for MIG-I and 150 sq. mts. for MIG-II categories

Who is a person belonging to MIG-I category?

MIG-I beneficiaries have an annual income above Rs. 6.00 lakhs to Rs. 12.00 lakhs.

Who is a person belonging to MIG-II category?

MIG-II beneficiaries have an annual income above Rs. 12.00 lakhs to Rs. 18.00 lakhs.

How to apply SBI Home Loan under Pradhan Mantri Awas Yojana (PMAY)?

First of all, you apply for home loan from SBI and along with your loan application, you need to fill the Pradhan Mantri Awas Yojana (PMAY) Form and submit it with your loan application form with the bank. Bank will take care of its processing. Bank will check your eligibility and if you are eligible in the category you have applied for like EWS/ LIG/ MIG-I/ MIG-II, then accordingly the interest subsidy would be credited in your bank account.

Tax Benefits of availing Home Loan

There are two types of tax benefits associated with home loan for Resident Indians:

Repayment of the Principal Amount: One can get a Tax rebate under section 80C of the Income Tax Act on whole amount repaid by him in a financial year, maximum upto Rs. 1,50,000/- each financial year (Increased from 1 Lakh to Rs. 1.5 Lakh in Budget 2014).

Repayment of the Interest on Home Loan: Tax Benefit on Home Loan for payment of Interest is allowed as a deduction under Section 24(1) of the Income Tax Act. One is eligible for a Tax Rebate of maximum of Rs. 2 lakh per financial year for home loan interest paid by him/her during that financial year.

What is the Impact of MCLR on EMI of SBI Home Loan Borrowers?

After April 1, 2016, all bank loans (including home loans) are linked to the bank's MCLR with or without a mark-up or spread (bank margin). Earlier, they were linked to the bank's base rate. All banks are required to disclose their MCLR each month.

Banks generally hike MCLR, whenever there is a hike in Repo Rate by the RBI. Banks may increase MCLR due to surging bond yields and higher provisioning requirements, even when the RBI has not hiked Repo Rate.

Home Loan Interest Rate can be equal to the MCLR or have a 'margin' or 'mark-up' or 'spread' but can never be lower than MCLR.

"Home Loan Interest Rate is linked to the bank's MCLR. If MCLR goes up, the home loan rates will also go up. Home Loan Interest Rate will not be impacted by hike in MCLR only if banks reduce the mark-up (margin) in the home loan. If MCLR goes down, the home loan rates will also go down."

For MCLR-linked home loans, the rate is reset after 6 or 12 months according to the agreement between the borrower and the bank. The interest rate applicable on the reset date will become the new rate on which the future EMI's will be calculated.

What should Base Rate Home Loan Borrowers do?

Home Loan Interest Rate of old home loan borrowers (who had taken home loans before April 1, 2016) are linked to the base rates of the banks. Hence the EMI which they are paying is also linked to base rate. Banks have always remained very sluggish for passing on the benefits of RBI rate cuts to the borrowers.

Now after April 1, 2016, Home Loan Interest Rate is linked to MCLR (Marginal Cost of funds based Lending Rate) for home loan borrowers in order to resolve the problems of the Base Rate regime.

It will be beneficial for them to switch to MCLR linked rate if the difference between what they are paying (under base rate) and what the bank is offering (under MCLR) is significant. So they must switch to MCLR linked rates, if outstanding loan is high and the remaining tenure is also long.

In that situation, Base Rate Borrowers have following two options:

(1) Switch to MCLR linked home loan with the same bank: It is beneficial, in case the bank is charging a nominal switching fee such as 0.50% or less on outstanding amount.

(2) Transfer the loan to another bank on MCLR: It is feasible, if new bank has waived off processing fee (which they generally do in order to attract the customer and increase their business) or is charging very less processing fee and legal and transfer costs.

The borrower must compare both the above-mentioned options and opt for the one which is more beneficial to them in terms of money saved. It will result not only in reduction of future EMIs but also a huge amount of interest will be saved during remaining tenure.

One may as well continue the loan on base-rate especially if the maturity is near and need not go through the process of conversion.

Further, the Reserve Bank (RBI) is going to link the base rate for loans given by banks to the MCLR from April 1, 2018. Once it happens, the base rate will automatically increase or decrease along with the MCLR without any specific action required for adjustment. This will be very beneficial for the home loan borrowers whose rates (EMIs) are still linked to the base rate.

EMI Payment Methods of SBI Home Loan

You can repay SBI home loan in any of the following methods:

(1) Electronic Clearing Service (ECS): Electronic Clearing System is preferred for faster payments and collections. If you have an account with other bank than SBI then you can use ECS for loan repayment. You will have to fill up a form and submit the same with your bank for debiting EMI every month from your account. In this case, your EMI will be automatically debited every month from your bank account and credited to SBI towards loan repayment instalment.

(2) Standing Instruction (SI): If you maintain your account with SBI, then you can use this method. Under this method, you will have to issue a Standing Instruction to SBI to debit your EMI amount on a due date every month from your SBI account and credit to SBI loan account towards loan repayment instalment. You save a lot of time and energy by giving standing instructions to the bank to carry out the transaction on your behalf each time.

(3) Post-Dated Cheques (PDCs): In this method, you need to submit post-dated EMI cheques to SBI for a certain period of time, which are deposited by the SBI on the due date. This alternative is cumbersome and time-consuming and involve a manual procedure of visiting the SBI in a timely manner.

Points to Note Regarding EMI Payment Methods

1. A fresh set of PDCs need to be submitted in a timely manner.
2. Post Dated Cheques are accepted only for non-ECS locations.
3. It is good to pay your EMIs either through the Standing Instruction or ECS for faster and timely remittance of your loan instalments.

In case of Prepayment of State Bank Of India Home Loan, will EMI change?

One can pre-pay State Bank Of India Home Loan without any prepayment charges as it allows prepayment at nil charges in case of floating rate home loans. If the borrower makes a prepayment, the outstanding balance of principal amount of his home loan reduces. Then in that case he has following 2 options:

1. He can continue with the existing and reduce the loan tenure
2. He can reduce the EMI and keep the loan tenure the same

Out of above 2 options, first option is more beneficial for the borrower as he pay less interest to the bank as the pay off home loan will be faster.

Ways to Reduce your SBI Home Loan EMI

• Negotiate with your banker on lower interest rate
• Apply for longer tenure
• Give maximum amount as down payment
• Pre-pay loan amount
• Switch to another bank/ FI offering lower interest rate

Latest News on SBI Home Loan

• January 29, 2020: SBI takes over as lead financier of Navi Mumbai Airport project
• January 16, 2020: SBI and South Central Zone of Indian Railways sign memorandum of understanding (MoU) for doorstep banking across 585 stations
• January 11, 2020: SBI launches new facility in its SBI Quick app to check bank holidays based on states
• January 8, 2020: SBI has launched a scheme for its home loan customers which guarantees the refund of the principal amount if a builder fails to complete the project within the stipulated time
• December 29, 2019: State Bank of India (SBI) announces that magstripe debit card will be deactivated by 31 December 2019
• June 1, 2018: SBI hikes MCLR for all tenures by 10 basis points i.e. by 0.10%
• March 1, 2018: SBI hikes MCLR for the first time in 2 years, SBI raised the key 1-year MCLR to 8.15% from 7.95%
• January 1, 2018: SBI reduces interest rates on loans linked to the base rate by 30 basis points to 8.65%

SBI Home Loan FAQ

1. What is an EMI?

   EMI or Equated Monthly Instalment is a fixed amount paid by you to the bank on a specific date every month. The EMI's are fixed when you borrow money from the bank as a loan. EMI's are used to pay both interest and principal amount of a loan in a way that over a specific number of years, the loan amount is repaid to the bank alongwith interest.

2. What is Pre-EMI Option?

   Pre-EMI is an option in which the borrower has to pay only interest on loan amount during the progress on the construction of the project. The actual EMI payment will be started only after his/ her possessing the house.

3. What are the various interest rates offered on home loans?

   Interest rates offered vary for women borrowers and others. Women borrowers are offered home loan at lower interest rate in SBI.

4. What is the eligibility criteria for getting SBI home loan?

   The eligibility criteria will be your repayment capacity which is determined by SBI based on various factors like age, income, credit history, value of the property, relationship with bank, etc.

5. Can joint-applications be made for SBI Home Loans?

   Yes. Joint applicants can be made for SBI Home Loans.

6. What processing fee is charged by SBI home loan?

   SBI charges a low processing fee for its home loans. 0.35% of Loan Amount, subject to a minimum of Rs 2000/- plus applicable taxes and Maximum of Rs 10,000/- plus applicable taxes, is charged by SBI home loan as processing fee. However, it is waived till 31.03.2018.

7. What are the maximum number of properties that I can own?

   You can own as many properties as you want.

8. What is a down payment?

   Down payment is the amount that is paid by the borrower on an up-front basis. Banks usually pay around 75% to 85% of the cost of the property, hence the rest amount the borrower needs to pay as down payment.

9. What is the average tenure of a home loan?

   Home loans average tenure ranges generally between 3 and 30 years.

10. Can I pre-pay my SBI home loan? Is there any penalty?

    Yes. You can pre-pay your SBI home loan without a pre-payment penalty fee.

11. What security do I need to furnish for SBI home loan?

    The property purchased out of the loan is taken by SBI as the security. However, if SBI feels then it can ask for additional securities too.

12. How is the interest on SBI Home Loan calculated?

    The interest on SBI home loans is calculated on daily reducing balance for the benefit of its customers.

13. Who is an NRI?

    NRI or Non Resident Indian is a citizen of India or a foreign national of Indian origin living outside India for the purpose of employment, business or any other vocation, which would indicate his intention to stay outside India for an indefinite period of time. An Indian would also be termed as an NRI if his stay in India is less than 182 days.

14. What is the mode of payment for NRI home loans?

    Generally, payments are made through NRI Account like NRO, NRE, NRNR and FCNR accounts. NRI home loan can be paid by way of direct remittances from abroad through normal banking channels or from other financial accounts as may be permitted by RBI.

15. What kind of job makes me eligible for SBI home loan?

    You can either be a salaried employee or self-employed for obtaining this loan. However, the only condition is that you should be earning a regular income and should be able to furnish proofs of the same.

16. What is the tax benfits available on SBI home loan?

    As per Section 80C of the Income Tax Act, in case of the principal amount, you can claim a deduction of upto Rs 1.5 lakhs while in case of interest, it is upto Rs. 2 lakhs.

17. Are long-term home loans beneficial or short-term loans?

    It dependes on the financial status of the borrower. If he wants lower EMIs then Long-term loans, if not, then he can go with short-term loans with higher EMIs with the benefit of lesser interest.