Mumbai: State Bank of India, the country’s largest commercial bank, said it will lower its home loan rates to 8% for new customers over the coming year, the second time it has reduced mortgage rates in as many months as the economy slows.
The new rate will be offered between 2 February and 30 April 2009, the bank said in a statement.
SBI had previously charged 9.75% on a floating basis for home loans, and 11.25-12.25% on a fixed basis.
Under a special scheme announced in December, it rolled rates back to 8.5-9.25% for loans up to Rs20 lakh ($41,000).
Private sector banks charge between 9.75% and 12.50% interest on home loans.
The central bank has aggressively cut its policy rates since mid-October as demand weakened across sectors from housing to automobiles.
The repo rate, at which the central bank lends to commercial banks, has been cut by 350 basis points to 5.5% over the past three months.
But the central bank left key policy rates unchanged at a review last week.