The Hongkong and Shanghai Banking Corporation has lowered its interest rates by 50 basis point on its home loans, making its fixed rate loans the lowest in the industry.

The floating loan rates for 4-to-5 years, which was earlier at 9.75 per cent, has now been bought down to 8.25 per cent, while for the 8-to-20 years slab, the rate is now at 9.75 per cent.

The interest rate on this slab earlier was at 10.25 per cent. The interest rate for fixed loan between eight to 20 year loans is now at 8.99 per cent from 9.25 per cent earlier. HSBC is the first institution where the interest rates on fixed loans rate have been pegged below the floating rate loans.

On the reason of charging lower interest rate for fixed rate, HSBC's country head, personal financial services, Vivek Kudwa said, "We feel that the possibility of interest rates softening much more does not exit. We want to wanted to give an opportunity to lock in at lower rates today."

HSBC is a late entrant into home loans. The bank currently has a portfolio of Rs 1,000 crore (Rs 10 billion).