SBI further extended home loan teaser rates till June 30

The State Bank of India (SBI), country’s largest lender has further extended its home loan teaser rates by two months till June 30.

Earlier bank had extended the scheme till April 30, as the scheme is popular with the customers and also bank has surplus liquidity therefore it has decided to extend its special concessional home loan rate scheme, an anonymous SBI official told the press.

The official said, "This scheme is very popular with customers. As far as liquidity is good, we can continue with this scheme".

No changes have done in the rates for the first three years but the rate for fourth year onwards has been slightly reduced.

For the first year, the home loan interest rate is 8 % and for the second and third years the interest rate will be 9%.

Then from fourth year onwards, on home loans up to Rs 50 lakh bank will charge 9.25% interest rate while higher loans will carry 9.75 per cent interest rate.

At present, from the fourth year onwards the scheme is offering 10 per cent interest rate.

Under the teaser rate schemes banks offer concessional home loans to borrowers in the initial years, thereafter the interest rates increases to align with prevailing market rates.

The government and the RBI has shown concern over these schemes and said these may impact financial stability of lenders.

However the two other banks ICICI bank and HDFC Bank had also re-introduced their teaser rate schemes but on Friday the schemes of both the banks had expired and they have no plans of extending it.