SBI Cuts Home Loan Rates by up to 25 bps

In 2019, The State bank of India had announced a reduction of 25 basis points (bps). This resulted in the reduction of the External Benchmark Based Rate (EBR), from 8.05% to 7.80%. The revised rates for the same were scheduled to arrive on Jan 1, 2020.
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As per a lender, the reduction will give room for interest rates, in the case of existing Home Loan customers and Micro, Small and Medium enterprise (MSME) borrowers, who have availed for the External Benchmark Based Rates to 25 bps.

To add on, the State Bank of India stated that the SBI Home Loan Interest Rates for new home buyers would begin from 7.90% p.a., then the earlier rate, which was 8.15%. Usually, over the RBI’s repo rate (5.15%), SBI will charge the spread of 265 bps, to calculate the EBR. To go with the flow, the lender charges a premium rate of 10 bps – 75 bps, to charge an effective Rate of Interest on the homebuyer.

Note: Banks are supposed to reset their EBR every three months.

As of now, it is the thirteenth consecutive reduction by the SBI on the Marginal Cost of Funds Based Lending Rates (MCLR), 2020, the revised rates cater to 6.70%. While the three-month MCLR is 6.70%, the six-month MCLR goes up to 6.95%.

Year MCLR Revised Rates
1 7%
2 7.20%
3 7.30%

With regards to the existing MCLR, the tenures provided are,

Tenure Existing MCLR Revised MCLR
Overnight 6.95% 6.70%
1 month 6.95% 6.70%
3 months 7.00% 6.75%
6 months 7.20% 6.95%
1 year 7.25% 7.00%
2 years 7.45% 7.20%
3 years 7.55% 7.30%

The SBI has also raised the EBR and the RLLR by 40 bps. But, there have been reductions. The EBR has come down from 7.05% to 6.65%, and the RLLR has come down from 6.65% to 6.25%. These rates were supposed to be announced on May 22, 2020.

The State Bank of India further stated that the EMI related to the SBI Home Loan accounts would be cheaper by INR 421, whereas those linked to the RLLR/ EBR will face a reduction of INR 660 for a loan tenure of 30 years of a loan amount of INR 25 Lakh.

Note: The similar rate cuts will be applicable for Home Loan customers in across eight metro cities. If you apply through ‘You Only Need One (YONO),’ you will receive a concession of 5 bps on Home Loans.
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C S Shetty, the Managing Director of SBI, said that this move would encourage homebuyers to plan their future homes. With the country geared up for a world, post-covid, the SBI has been witnessing customer demands, for which it continues to provide lucrative options to fulfil the needs of the customers.
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In the month of September 2020, the bank introduced a bunch of festive offers for the retail borrowers, along with a 100% waiver on the processing fee for the customers applying for a car, gold and personal loans through YONO.

For those who have just stepped into the world of banking and applying for SBI Home Loans, the following is the criteria,


  • Suits every customer’s needs
  • Lower Rates of Interest
  • Low Processing Fee
  • No hidden charges
  • No room for a prepayment penalty
  • Provides a repayment period of 30 years
  • Concession on interest for women


  • Indian resident
  • Minimum age: 18 years
  • Maximum age: 70 years
  • Tenure: Up to 30 years

Note: To avail for the loan amount provided by the SBI, browse through their website to know more.


  • Identity card; Loan application; Proof of identity (PAN card, Passport, License, Voter ID); Proof of residence
  • Property papers: Submit permission papers for construction
  • Document for registered agreement for sale
  • Occupancy Certificate
  • Share Certificate
  • Copy of the Approved Plan
  • Payment receipts
  • Account statement
  • Proof of income for Salaried applicant, the co-applicant/ Guarantor
  • Salary slip of the last 3 months’ Copy of Form 16 for last 2 years
  • Income proof of non-salaried, co-applicant/ Guarantor
  • Proof of Business address
  • IT returns of the last 3 years
  • Balance sheet
  • Business license details
  • TDS certificate
  • Certificate of Qualification

With a clearer picture provided above on the SBI rate cut on Home Loans, along with the criteria specification on Home Loans for the newbies, you know which bank to opt for. So, get to the nearest SBI branch within your proximity or apply for Home Loans on their web portal before opting for any other banking institution.

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