Canara Bank on Wednesday announced 0.5-0.75 per cent cut in housing loans rates to 8.5-9.25 per cent with monthly installment payments coming down to Rs 911 per lakh for 20-year loan from February.

The rate cut comes days after LIC Housing Finance, SBI, PNB and other major players slashed rates in tune with the softer interest rate regime.

Canara Bank claims the fixed rates of 8.5 per cent for loans up to five years and 9.25 per cent for 6-20 years, as one of the most competitive rates in the industry.

The floating rates for loans up to Rs 10 lakh and a maturity period of five years has been reduced to 8.75 per cent while that for 6-20 year loans it would be 9.75 per cent.

For loans above Rs 10 lakh, the rate is 0.25 per cent more for 6-20 year loans.

"With a view to remain aggressive and to pass on the benefits of the present low interest rate regime to the new housing loan customers, Canara Bank has slashed the rates by 50-75 basis points," the bank said in a release.

With rate cut, the bank now offers an estimated monthly installment payment of as low as Rs 911 per lakh for a 20 year loan, it said.

The bank has decided to waive processing and administrative fees, while charging the interest on a daily reducing balance basis.