Public-sector lender, Bank of India has joined the club of other banking majors like State Bank of India and ICICI Bank, to offer cheaper housing loans to borrowers.
The bank would offer 8% fixed rate for home loans upto Rs30 lakh and 8.25% for loans above Rs30 lakh, for first two years, a press release said here today.
The scheme — Star Own Your Home — is applicable for all new loans availed between January 1-February 28, 2010. After the two-year offer period, the lender will charge interest rate based on the prevailing floating rates.
The bank has also waived all processing charges to attract borrowers, and has fixed the maximum amount that can be availed under the scheme as Rs1.5 crore.
Other banks that have come with similar schemes include Kotak Mahindra Bank, IDBI Bank and home loan financier, Housing Development Finance Corporation (HDFC).
IDBI Bank, which announced its special home loan scheme recently, is offering 8.25% fixed rate for all its new loans till March 2012.
The bank had made this offer applicable for all new home loan customers applying on or before March 31, 2010, and taking a part or full disbursement during the offer period.
Presently IDBI Bank is offering 8.75% for loans up to Rs30 lakh, 9% for loans between Rs30 lakh and up to Rs50 lakh and 9.25% for loans above Rs50 lakh.
Early this month, ICICI Bank, Kotak Mahindra and HDFC had announced special home loan schemes with fixed interest rate structure for a particular period, irrespective of the loan amount.
While ICICI Bank offered new home loans at a fixed rate of 8.25% for the first two-years, irrespective of the loan amount, Kotak Mahindra Bank offered 8.49% fixed interest for 30 months.
Country's largest lender, State Bank of India set the ball rolling by announcing a scheme offering an 8% interest rate early this year.
The scheme, earlier scheduled to end in November, was extended till March 2010, following a huge demand from the market.
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