Days after the Reserve Bank of India (RBI) cut repo rate by 25 basis points, India's largest bank SBI today lowered its Marginal Cost of Funds based Lending Rate or MCLR by 10 basis points across all tenors. The rate revision becomes effective from 10th October. SBI's one-year MCLR comes down to 8.05% per annum, from 8.15% per annum, making home loans cheaper for borrowers. This is the sixth cut in MCLR by in FY 2019-20.

"In view of the festival season and extending benefit to customers across all segments, SBI has reduced its MCLR by 10 bps across all tenors," SBI said in a statement.

State Bank of India (SBI) is the largest commercial bank in terms of assets, deposits, branches, customers and employees. It also claims to be the largest mortgage lender in the country.

MCLR rates are based on the bank's own cost of funds. If your home loan is linked to SBI's MCLR rate, the latest cut may not bring down your EMIs immediately. MCLR-based loans typically have a one-year reset clause.

For new borrowers, SBI also offers a repo-rate linked home loan scheme. Under this scheme, the loan rate gets adjusted as and when RBI revises its benchmark rate. SBI charges a spread of 265 basis points over the RBI's repo rate (currently at 5.15%) to calculate its external benchmark-based lending rate. SBI also charges a premium for effective home loan rate.

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