Banks reduce interest rates on housing loans

KOCHI: Commercial banks have reduced interest rates on housing loans in line with the change in the repo rate announced by the Reserve Bank of India in the monetary policy review. The repo rate has been cut to 6.25% from 6.50%. State Bank of India, Canara Bank, Union Bank, Punjab National Bank, and Bank of Baroda are the ones that have reduced the interest rates on loans linked to the repo. Homeowners who do not want a change in the loan tenure can choose the option to reduce their monthly installment (EMI).​ The loan tenure will be shortened​ in case there is no change in the existing EMI amount.​ Both new and existing home loan borrowers will benefit from this. Most home loan borrowers have opted for the repo-linked interest rate.

SBI's external benchmark-linked home loan interest rate will be reduced from 9 percent to 8.75 percent. The repo-linked loan interest rate will be reduced from 8.75 percent to 8.5 percent.