India's largest lender, State Bank of India (SBI) is known for giving Home Loans on affordable rates. SBI Home Loans is the largest Mortgage Lender in India. It has given loans to over 30 lakh families so far, as per its website. Many of the existing home loan borrowers remain curious to know about the change in interest rates as and when this happens in order to check if they can benefit. Here is the answer from SBI Home Loans:-

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-When will my interest rate change?

The interest rates will change at quarterly interval on 1st day of calendar quarter subsequent to the change in RBI’s Repo Rate.

-  How is the interest rate calculated?

The interest on home loans is usually calculated either on monthly reducing or yearly reducing or daily reducing balance by Bank. 'SBI charges interest on daily reducing balance'.

Specifics are mentioned below: -

-Annual reducing method: In this system, the principal, for which you pay interest, reduces at the end of the year. Thus, you continue to pay interest on a certain portion of the principal that you have actually paid back to the lender. This means that the EMI for the monthly reducing system is effectively less than the annual reducing system.

-Monthly reducing method: In this system, the principal, for which you pay interest, reduces every month as you pay your EMI.

-Daily Reducing method: In this system, the principal, for which you pay interest, reduces from the day you pay your EMI. EMI in the daily reducing system is less than in the monthly reducing system and a year is treated as consisting of 365 days irrespective of leap or non-leap year.

(All details as per given on the https://homeloans.sbi/ website under FAQ section)