Here is good news for home buyers planning to take a loan of above Rs 20 lakh.

India’s top mortgage lender Housing Development Finance Corp (HDFC), on Friday, has slashed housing loan rates for new loans by 50 basis points (bps) for a limited period.

Under the scheme, home loan clients can now avail loans between Rs 20-30 lakh at an annual interest rate of 9.75%, down from 11.25% earlier.

Moreover, the customers looking for loans above Rs 30 lakh would have to pay an annual interest rate of 10.75%.

A spokesperson for HDFC said that the scheme will remain open only till February-end.

“Our cost of fund has come down to comfortable levels to disburse loans at these rates. Most of our home loan borrowers fall below the Rs 30 lakh slab and, therefore, this cut in interest rates will help new customers,” said Keki Mistry, HDFC Vice-Chairman and Managing Director, “Also, with a slump in the property market, developers are offering homes at attractive prices. The realtors’ price coupled with our revised rates should help customers buy homes now.”

Last Month, HDFC cut mortgage rates for new and subsisting clients after sharp drops in annual inflation rate led the central bank to slash interest rates, which in line resulted in a slump in cost of funds for the lenders. In December, HDFC cut lending and deposit rates by 50 bps.

Following this, HDFC’s retail prime lending rate (PLR) presently stands at 14.5%.

The newest offer would expand the scope for clients to discover homes at reasonable rates, especially across metropolitans including Mumbai, Delhi and Bangalore, where the property rates are normally quoted above Rs 20 lakh.

Thus far, none of the lenders announced special rates for home loans in the Rs 30 lakh category.

Presently, SBI offers home loans above Rs 20 lakh at 10.25% and ICICI Bank at 12.50%.