Good News: State Bank of India waives-off processing fees on home loans till August 31

The country’s largest lender, State Bank of India (SBI), announced Monsoon Dhamaka Offer with a 100% waiver on processing fees on home loans. Currently SBI charges 0.4% of the home loan value towards the processing fee. A home loan customer stands to gain substantially through this limited period offer.

Interest rates in the economy have drifted downwards. The rate of interest payable on one year fixed deposit of State Bank of India is 4.9% compared to 8.25% in April 2015. The home loans too are priced accordingly. SBI home loans are also priced at 6.7%. Women borrowers are offered a lower interest rates by five basis points. If the application is initiated using YONO app, then the interest rate charged is five basis point lower than the card rate.

Other lenders are also offering competitive home loan rates. In the new regime, the rate of interest payable on home loans are linked to repo rates decided by Reserve Bank of India. As private sector lenders offering home loans are pricing their loans aggressively, the state owned SBI is also trying its best to gain market share by waiving processing fee on home loans.

The Monsoon Dhamaka Offer is for a limited period ending on 31 August 2021.

C.S. Setty, MD (R&DB), SBI said, “Processing fee waiver will facilitate and encourage home buyers to take decision with ease, as interest rate is at its historic low. We strive to be a banker to every Indian and thereby, be partners in nation building.”

The announcement by SBI may see responses from other lendors with similar moves and may lead to rate war.