The Hindu Business Line : Canara Bank cuts home loan rates

CANARA Bank has cut the interest rate on home loans by 0.25 percentage point across all maturities and on fixed and floating rate options. The new rates are effective April 1. Under floating rates the interest rate would be 7.25 per cent instead of 7.5 per cent for loans up to five years, irrespective of loan size, Canara Bank said in a release here on Monday.

For loans above five years tenure, the rates are down to eight per cent from the earlier 8.25 per cent up to a loan size of Rs 10 lakh irrespective of tenure. For loans above five years exceeding Rs 10 lakh, the new rate would be 8.25 per cent down by 0.25 percentage point from the earlier 8.5 per cent irrespective of tenure. Fixed rates applicable for the above three categories would now are 7.75 per cent (8 per cent), 8.75 per cent (9 per cent) and 9 per cent (9.25 per cent), it said.

This rate cut, coupled with waiver of processing charges up to September 30, 2004, gives the bank a competitive edge over other players in the home loan market, the release said.

The bank has a housing loan portfolio of about Rs 2,900 crore and provided value-added offerings like life insurance cover and property cum accidental death cover for loan borrowers at their option at competitive premium rates.

This provides comfort to the customers for liquidating the loan liability in the event of death of borrowers or destruction of house property.