SBI news: State Bank of India takes this BIG decision on home loans - Check details here

In a bad news for home loan seekers, State Bank of India recently increased the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent. 

The hike on home loans of country's largest public lender came into effect from April 1, 2021.

SBI's decision to hike interest rate on home loans is a bad news for home loan seekers because the move may encourage other public sector banks as well as private banks to hike their interest rate. 

It may be recalled that SBI had lowered the minimum interest rate to 6.70 per cent from 6.80 per cent on March 1, 2021. But the bank had then announced that it was a limited period offer for interested homebuyers.

The SBI has also deciced to add a processing fee on all home loans from April 1, 2021. It is expected that SBI would charge SBI is expected to charge 0.40 per cent of the loan plus GST -- subject to a minimum of Rs 10,000 and a maximum of Rs 30,000 plus GST -- as a processing fee.

In March, the SBI shad announced that its home loan portfolio of Rs 5 lakh crore was the largest in the country. Experts maintain that other banks like HDFC Bank, ICICI Bank and Bank of Baroda would also follow SBI and increase home loan interest rates soon.