Canara Bank has cut the interest rate on home loans by 0.25 per cent across all maturities and fixed and floating rate options.

Under floating rates which has been effective from April, the interest rate would be 7.25 per cent instead of 7.5 per cent for loans up to five years, irrespective of the loan size, Canara Bank said in a release on Monday.

For loans above five years, the rates are down to eight per cent from the earlier 8.25 per cent up to a loan size of Rs 10 lakhs irrespective of tenure.

For loans above five years exceeding Rs 10 lakhs, the new rate would be 8.25 per cent down by 0.25 per cent from the earlier 8.5 per cent irrespective of tenure.

Fixed rates applicable for the above three categories now are 7.75 per cent (eight per cent earlier), 8.75 per cent (nine per cent) and nine per cent (9.25 per cent), it said.

This rate cut, coupled with waiver of processing charges up to September 30, 2004, gives the bank a competitive edge over other players in the home loan market, it said.

The bank has a housing loan portfolio of about Rs 2,900 crore (Rs 29 billion) and provided value added offerings like life insurance cover and property cum accidental death cover for loan borrowers at their option at competitive premium rates.