State Bank of India has announced a 25 basis points cut in home loans rate to 8.35 per cent per annum, the lowest in the market. The new rate is effective from May 9.

The bank, in a statement, said the effective interest rate for all eligible salaried customers will be 8.35 per cent for loans up to Rs 30 lakhs. Besides, an eligible home loan customer can also avail of an interest subsidy of Rs 2.67 lakhs under the Pradhan Mantri Awas Yojana scheme.

India's largest bank also said the interest rates for customers availing of home loans above Rs 30 lakhs has also been reduced.

Further, to supplement the affordable housing push, SBI has come out with special offerings for Construction Finance to builders for affordable housing projects.

"This will give a dual push both for construction finance and also for home finance for affordable homes," the statement said.

Rajnish Kumar, Managing Director, SBI said, “We have seen a steep hike in home loan enquiries recently and a reduction in rates will further help millions of home buyers fulfill their dream of owning a home.”