Bangalore: State-owned Canara Bank on 3 October announced a 0.50% cut in floating interest rates on home loans, indicating easing cost of funds that prompted segment leader HDFC too to rollback rates last week.
The reduction in rates is applicable across tenors and slaps and would come into effect from 4 October, the public sector bank said in a statement.
The rate of interest for fresh housing loans up to Rs20 lakh for repayment periods up to five years is 10.25%, five years to 10 years 10.50% and 10 years to 20 years is 10.75%, the release said.
The rate for fresh housing loans above Rs20 lakh for repayment periods up to five years is 10.50%, five years to 10 years 10.75% and 10 years to 20 years 11%, it said.
Canara Bank also said it had reduced processing charges by 50 per cent up to December 12 this year. There was no change in fixed interest rates.
On 24 September, HDFC Ltd, the biggest player in the home loan segment, reduced interest rates on floating housing loans by an identical 0.50%.
“The funding costs have come down by 50 basis points and we are reviewing our lending rates,” HDFC chairman Deepak Parekh had told reporters days before the cut was announced.
Even State Bank of India Chairman O. P. Bhatt has indicated that his bank would offer discounts on home loans, while hoping that the Reserve Bank would bring down key lending and borrowing rates in its policy review at the end of this month.