SBI raises interest rates on repo-linked home loans

(SBI) raised its external benchmark lending rate (EBLR) on home loans by 40 basis points to 7.05% and the RLLR would be 6.65% + CRP. The new interest rates will take effect from June 1, 2022, according to the website.

Previously, the EBLR was 6.65%, while the Repo-Linked Lending Rate (RLLR) was 6.25%.

According to the SBI website, “External Benchmark based Lending Rate (EBLR) = External Benchmark Rate (EBR) + Credit Risk Premium (CRP)”.

When offering any type of loan, including home and car loans, banks add a credit risk premium (CRP) over EBLR and RLLR.

Since January 2019, SBI has been using an EBLR linked to the repo rate. The EBLR rate remains unchanged and fluctuates according to the Reference Interest Rate (RBI) of the Reserve Bank of India.

Last week, SBI announced that it had further increased its marginal cost-based lending (MCLR) rates on loans by 10 basis points (bps). The new MCLR interest rates come into effect on May 15, 2022.

According to the SBI website, the overnight, one-month, three-month and six-month MCLR rates were all increased by 10 basis points to 6.85%, 6.85%, 6.85% and 7.15%, respectively. Similarly, the MCLR for a one-year term is 7.20%, two years at 7.40% and three years at 7.50%.

Also Read: SBI Raises MCLR on Loans: Check Latest Interest Rates Here

Important FAQs to note

What is EBLR?

According to the SBI Home Lending FAQ, “EBLR stands for External Benchmark Lending Rate. SBI has adopted the Repo Rate as an external benchmark to link its variable rate mortgages from 01.10.2019.

It is a new interest rate structure. All variable rate mortgages will have interest rates tied to the external benchmark. The Repo Linked Loan Rate (RLLR) is linked or based on the RBI repo rate, which is updated regularly. Each bank’s RLLR is different. Every time the repo rate changes, the RLLR is adjusted.

Can existing borrowers take advantage of the new interest rate?

Yes, variable rate mortgage borrowers with regular account maintenance on the changeover date can be migrated to the new interest rate structure.

What are the migration costs to the new structure?

One-time transfer fee of Rs. 1000/-* + taxes is applicable. *Conditions apply.

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