mumbai state bank of india will permit home loan borrowers to shift to lower interest rates the move is aimed at strengthening customer bondage and can also lead to gains for millions with mortgages if rivals match the gesture the decision will help a third of its home loan customers of more than 17 lakh in bringing down interest payments by as much as two percentage points or a gain of about rs 6000 a month on a 20year rs 50lakh mortgage a backoftheenvelope calculation shows conversely it could bring down the tenor by a few years it was a choice between retaining customers from walking to another bank or forgoing interest income said an sbi official who did not want to be identified sbi chose the latter as it will also create some goodwill sbi is initiating steps to turn customerfriendly including becoming the first to waive prepayment penalty it is on a customeracquisition drive even at the cost of sacrificing some profitability the bank cut its processing fee a major component of profits for some private banks it currently charges 1075 for home loans up to rs 30 lakh 11 for loans between rs 30 lakh and rs 75 lakh and 1125 for upward of rs 75 lakh compare this with 1375 which customers who took loans rs 3075 lakh before the bank launched the socalled teaser rates in 2009 pay if a customer chooses to move to the new structureby paying 1 of outstanding as conversion fee he would be charged the same as new borrowers