ICICI Bank, the country's largest private sector bank, has cut its home loan rates by 25-50 basis points (100 basis points = 1%) for new customers with immediate effect.Unfortunately, existing home loan borrowers from the bank will continue to pay a higher interest rate. ICICI Bank is the first private sector bank to reduce rates in the wake of the Reserve Bank of India's decision to cut its benchmark policy rates-repo and reverse repo rates-by 50 bps on Wednesday. Earlier, State Bank of India and Canara Bank had reduced interest rates on home loans.

public sector Bank of Baroda also cut its benchmark lending rate by 50 bps to 12% with effect from April 1. The cut in the bank's prime lending rate will reduce the interest burden in all its advances which are linked to its benchmark prime lending rate (BPLR, a rate offered by a bank to its best borrowers), including home loans from the bank. UCO Bank too announced on Friday that it was cutting BPLR by 50 basis points to 12.50% from the current level of 13%. According to the new floating rate structure of ICICI Bank, the interest rates would be 9.75% against 10% earlier for home loans of less than Rs 20 lakh. For loans between Rs 20-30 lakh, the new rate would be at 10%, compared with 10.5% earlier, while for loans of Rs 30 lakh and above, the interest rates would be at 11.50% against 12% earlier.

"The rates are still fairly stiff compared to other major players, especially if you look in the Rs 30 lakh and above category. If you look at the other major players, the rate is in the range of 10.50-10.75%,'' said Harsh Roongta, CEO, Apnaloan, an independent loan tracking firm. "LIC Housing Finance offers very attractive rates. Even Canara Bank's new offer was attractive,'' he added. Earlier this week, Canara Bank announced that it would charge 8.25% interest for the first year for loans up to 20 years. Last month, SBI announced a home loan scheme where interest rate for the first year was fixed at 8% and the rate would change from the second year. The move invited criticism from other housing loan providers, which feared that the scheme was a deliberate attempt to wean away their existing customers. Many banks are likely to take cue from ICICI Bank and announce rate cuts soon. visit for all the home loan rates of different banks  http://www.maaproperties.com/Pages/HomeLoans.aspx