Authorities & RERA
The RERA Interest Rate
The same number cuts both ways. That is the part most people do not expect.
The short answer
Most state RERA rules set the interest rate for delay compensation at the State Bank of India's highest Marginal Cost of Lending Rate, plus 2%. The same rate applies whether the promoter owes you for a late possession or you owe the promoter for a late instalment.
The formula
The rate is not a fixed percentage written permanently into the Act. It is tied to a moving benchmark, SBI's highest MCLR, plus a fixed 2% margin on top. As SBI's MCLR moves, so does the RERA interest rate, which keeps the figure realistic against actual borrowing costs instead of freezing it at whatever number seemed reasonable in 2016.
The formula
RERA interest rate = SBI's highest MCLR + 2%
- SBI highest MCLR
- Published monthly by SBI. Check their website for the current figure.
- Fixed margin
- 2%, added on top, the same for every state that follows the Model Rules structure.
Most states adopted this exact structure from the Model RERA Rules, though it is worth confirming the specific rule in your state rather than assuming it is identical everywhere.
Why it applies both ways
This is the detail that surprises most buyers. The same rate that a promoter pays you for delaying possession is also the rate you pay the promoter if you delay an instalment. RERA did not invent a punitive rate reserved only for developers. It fixed one rate and applied it symmetrically, which is arguably the point: neither side can charge the other more than what is fair on both sides of the same relationship.
When the clock starts
Interest for delayed possession runs from the date declared in your agreement for sale as the promised possession date, not from the date you actually paid your last instalment or the date construction visibly stalled. Check your agreement for the exact date it names, since that date is what the interest calculation anchors to.
What it comes to in practice
Because the rate moves with SBI's MCLR, there is no single percentage that stays correct over time. As a rough sense of scale, this formula has generally landed in a band that most home loan borrowers would recognise as being close to typical floating home loan rates, since both are built on similar underlying benchmarks. For the current figure, check SBI's published MCLR directly and add 2%, or check your state RERA authority's own published rate if it states one explicitly.
Frequently asked questions
Is the RERA interest rate the same in every state?
Most states follow the Model Rules structure of SBI's highest MCLR plus 2%, but it is worth confirming your specific state's rule, since a small number of states have used a different reference rate or margin.
Does the interest rate change over time?
Yes. Because it is tied to SBI's MCLR rather than a fixed number, the effective rate moves whenever SBI revises its MCLR.
Do I really have to pay the same rate if I am late on a payment?
Yes, if your state's rule sets a symmetrical rate as most do. Check your agreement for sale and your state's RERA rules for the exact figure that applies to you as a buyer.
Is this interest rate the same as a home loan interest rate?
They are calculated differently and set for different purposes, though both are commonly benchmarked off similar reference rates, which is why the two numbers often land in a broadly similar range.
From what date is delay interest calculated?
From the possession date stated in your agreement for sale, continuing until the date you actually receive possession or a refund, whichever the case.