How Does SBI Home Loan EMI Calculator Help Amid Rising Interest Rates?

The scenario is completely reversed as far as home loan is concerned. From 2015 to 2017, home loan rates were constantly coming down, bringing cheers among those planning to buy a home. State Bank of India (SBI), in particular, slashed the MCLR by 90 basis points to 8.00% from 8.90% in January 2017. With the reduction, SBI had reduced the benchmark interest rate by 200 basis points from January 2015.

The effective lending rate was 8.40% at that time before it was brought further down to 8.35% and 8.30% per annum. But now, the rates are now firming up with the lowest and top limits being 8.45% and 9.00%, respectively.

In a scenario where rates are climbing up, there’s a need to focus on SBI Home Loan EMI Calculator for both new and existing borrowers. So, stay connected with the article that can help you know about the calculator to steady the course of your home loan journey.

How Can SBI Home Loan EMI Calculator Help New Borrowers?

It can help new borrowers by setting their budget in accordance with the repayment needs. So, go online and use the calculator to good effect. To use it well, you must be aware of three elements- loan amount, interest rate and tenure. The loan amount can be funded at 75%-90% of the property value, with the remaining 10%-25% to be paid from the borrower’s end.

SBI Home Loan Interest Rates vary based on the quantum of finance. While a loan of up to ₹30 lakhs can be funded at 8.45%-8.75% per annum, the loan between ₹30-75 lakhs is financed at 8.60%-8.90% p.a. You can get a loan past ₹75 lakhs at 8.70%-9.00%. A maximum of 30 years can be given to pay off the loan.

Example – Ravi Pandey, a 30-year old engineer, applies for a home loan worth ₹40 lakhs for 20 years at SBI. In that case, he would need to service the debt at 8.65%-8.75%, which would result in an EMI and interest outgo of ₹35,094 and ₹44,22,467, respectively.

What About the Existing Customers?

The rise in MCLR-linked interest rates does not pinch the borrower straightaway. The rates get reset every year. So, if you availed a loan in October 2017, the rates offered to you at that time will get reset once October 2018 arrives. And, the pattern will continue like that.

So, whatever the hike SBI home loan makes with respect to rates till October this year, you won’t get affected. In case on the reset date, the rates seemed much more than what it was at the time of availing a loan, you can request the lender to shorten the tenure a bit to curtail the overall outflow of interest. If SBI agrees to do so, the EMI will rise but would bring down the interest. But reduce the tenure slightly so that  the hike in the installment can be accommodated easily. You can check the effect of a rejig in a calculator.