Central Bank joins rate war; offers home loans up to Rs20 lakh at 8 per cent

12 March 2009

Close on the heels of the State Bank of India and Canara Bank cutting their home loan rates to 8 per cent and 8.25 per cent, respectively, another public-sector lender Central Bank of India has announced a freeze in lending rates on new housing loans up to Rs20 lakh at 8.0 per cent for one year.

Home loans between Rs5 lakh and Rs20 lakh will now be offered at 8 per cent as against 9.25 per cent earlier, the bank said in a press release.

Central Bank had, in February, reduced its lending rate on home loans up to Rs5 lakh from 8.5 per cent to 8 per cent.

All loans of up to Rs20 lakh, sanctioned between March 12 and 30 April 2009 will now be eligible for the low interest rate, the bank said.

Central Bank has targeted an additional Rs500 crore of home loans by April-end with the introduction of the new scheme, the press release said, adding, the rates will be reviewed at the end of one year in the light of the prevailing market situations.

State-owned banks started cutting their home loan rates after SBI, country's largest lender, froze interest rate for new home loans at eight per cent for one year recently.