Bank of Baroda (BoB) on Sunday announced a reduction in home loan interest rates by 40 basis points in a limited-period offer.

The move is an attempt to increase the lender’s market share in the highly competitive housing loan segment.

It will see BoB offering loans at 8.50 per cent, which is one of the lowest and most competitive rates in the industry. The state-owned bank said the offer will last till March 31, 2023.

The new rate is available for borrowers applying for fresh loans, balance transfers and for home improvement.

The rate is linked to a borrower’s credit score.

In addition to the revision in its interest rates, the bank is offering a 100 per cent waiver on processing charges.

BoB also announced a reduction in its MSME loan interest rates to 8.40 per cent.

Medium and small enterprises applying for these loans will get an additional benefit in processing charges where 50 per cent will be waived.

“The bank is pleased to drop its home loan interest rates and introduce a very special limited period offer of 8.50 per cent. The offer will make home purchases more affordable for home buyers in the current scenario where interest rates have risen considerably. The reduction in interest rates for the MSME sector will further support aspiring entrepreneurs and finance their growth ambitions,’’ Ajay K. Khurana, executive director of BoB, said.

Khurana said the lender has also simplified the process of applying for a loan: Customers can digitally apply get approval for a home loan within 30 minutes by logging in to the BoB mobile banking app or visiting the bank’s website.

BoB said its home loans come with various features that include minimum documentation, flexible tenure of up to 360 months and no pre-payment or part-payment charges.

HDFC is also running a limited period festive season offer which is valid until March 31, 2023.

The mortgage lender is offering an interest rate of 8.7 per cent to its home loan borrowers with a credit score of 760 and above.