State-owned Bank of Baroda (BoB) on Friday went against the tide by reducing the home loan interest rate by a hefty 25 basis points to 6.50 per cent for a limited period. The move comes at a time some of the banks have raised interest rates by hiking their marginal cost of funds based lending rate (MCLR).

BoB’s decision is being seen as a move to increase its market share in the highly competitive home loan segment before the RBI begins to hike the policy repo rate, which could moderate demand for such loans.

In a statement, BoB said it has reduced its home loan interest rates from 6.75 per cent to 6.50 per cent for a limited period. The PSU bank added that this special rate is applicable till June 30.

The bank also announced a 100 per cent waiver on processing fees during this period.

With this, BoB continues to offer one of the lowest and most competitive home loan rates in the industry.

At present, the country’s largest lender State Bank of India offers an interest rate of 6.65 per cent to borrowers with a Cibil score of more than 800. For borrowers below this level, the interest rates range from 6.75-6.85 per cent.

BoB said the new rate beginning at 6.50 per cent is available for customers applying for fresh home loans as well as for balance transfers. It added that the special rate is available across all loans amounts and is linked to a borrower’s credit profile.

“We have seen a significant pick-up in home sales over the last many months and we are delighted to extend the good times for home

buyers with the introduction of a special, limited period interest rate offer of 6.50 per cent along with nil processing charges.