State Bank of India offers new rates to old home loan borrowers

State Bank of India, country’s largest public sector lender has planned to offer new, lower rates to old home loan borrowers. Currently, borrowers who have taken loans linked to SBAR (State Bank Advance Rate or the prime lending rate) are paying as much as 2-3 percentage points more than existing floating rates that are linked to the Base Rate, as base rate is lower than the SBAR.

Banks base rate is currently at 10%, while the SBAR is 14.75%. Besides, the bank has also reduced the spread it charges over the base rate for home loans resulting reduced home loan rates.

The customer who wants to switch over for them there is no restriction on the tenure or the amount of the loan but bank is charging a fee of 1% of the outstanding amount to switch to the new rate.