A number of banks have announced attractive housing loan schemes recently that can help you if you are looking to purchase a home soon. Many of these schemes offer lower interest rates for the first few years and then typically the loan interest rates are linked to the Bank's Prime Lending Rate (BPLR) for the remaining years of your loan repayment period. This article summarizes the key aspects of the schemes offered by all major banks to help you make a decision quickly. You can also take advantage of the 1% subsidy announced by Government of India recently for home loans.

Some banks are also offering borrowers the ability to convert to either a fixed or floating loan after the special interest rate period has expired.

In addition to the lower interest rates for the first few years, some of these special schemes also come with other perks such as lower margin requirements, waiver of processing fees and no pre-payment charges.

Many of the special schemes have been announced with an eye on the 2009 holiday season with the goal of increasing the housing loan intake thereby stimulating the housing sector related sectors of the economy such as construction, steel etc. Most of these schemes are limited time offers (many upto October 31 and some till December 31) and hence customers interested in taking a housing loan must act quickly.

State Bank of India (SBI), India's largest bank, has driven these special schemes by many other banks by coming up with its special home loan offer. Under this scheme, loans upto Rs. 5 lakhs come with a fixed interest rate of 8.00% for the first 5 years. At the end of the five-year period, a customer opting for home loans of less than Rs 5 lakhs can choose between a floating rate of 2.75 per cent below the State Bank Advance Rate (currently at 11.75 per cent) or a fixed rate of 1.25 per cent below SBAR for a further term of five years.

For home loans of between Rs 5 lakhs and Rs 50 lakhs, SBI will offer 8 per cent during the first year and 8.5 per cent for second and third years. From the fourth year, the customer can choose between a floating rate of 2.75 per cent below SBAR or at a fixed rate of 1.25 per cent below SBAR.

For over Rs 50 lakh loans, SBI will charge 8 per cent during the first year and 9 per cent for second and third years. From the fourth year, the customer can choose between a floating rate of 1.75 per cent below SBAR or at a fixed rate of 0.75 per cent below SBAR.

ICICI Bank has a special offer with interest rates of 8.75% for loans upto Rs. 20 lakhs, 9.25% for loans between Rs. 20 lakhs and Rs. 50 lakhs and 9.75% for loans above Rs. 50 lakhs.

LIC Housing Finance has a floating rate scheme with special interest rate of 8.75% for loans upto Rs. 75 lakhs. For home loan borrowers options for their 3 year Fix-o-Floaty scheme, the rates for new customers upto Rs. 75 lakhs will be 8.90%.

Canara Bank is offering a scheme where for home loans upto Rs. 30 lakhs, interest rate for first 12 months is 8.00%. Interest rate for next 48 months is 9.00%. Interest rate for above 60 months to upto 300 months is BPLR-2.50%. Changes in BPLR will not have any effect on the interest rates for the first 60 months. After 60 months the rate of interest is linked to BPLR. Rate of interest valid for loans sanctioned on or after 10.09.2009 upto 31.12.2009.

For home loans between Rs. 30 lakhs and Rs. 1 crore, Canara Bank's interest rate for first 12 months is 8.75%. Interest rate for next 48 months is 9.50%. Interest rate for above 60 months to upto 300 months is BPLR-2.00%. Changes in BPLR will not have any effect on the interest rates for the first 60 months for loans. After 60 months the rate of interest is linked to BPLR. Rate of interest valid for loans sanctioned on or after 10.09.2009 upto 31.12.2009.

For home loans above Rs. 1 crore and upto Rs. 3 crores, Canara bank's interest rate for first 12 months is 9.50%. Interest rate for next 48 months is 10.00%. Interest rate for above 60 months to upto 300 months is BPLR-1.00%. Changes in BPLR will not have any effect on the interest rates for the first 60 months. After 60 months the rate of interest is linked to BPLR. Rate of interest valid for loans sanctioned on or after 10.09.2009 upto 31.12.2009.

For loans above Rs. 3 crores, Canara Bank's interest rate is BPLR-0.50% subject to a minimum of 11.50% with 200% security. BPLR is currently 12.00%. Rate of interest is valid for loans sanctioned on or after 10.09.2009 upto 31.12.2009.

State Bank of Patiala is offering an interest rate of 8.00% for home loans upto Rs. 30 lakhs for first year of repayment. The interest rate for the 2nd and 3rd years is 9.00% for loans upto Rs. 30 lakhs. From the 4th year onwards, the interest rate will be the then applicable floating home loan rate linked with BPLR. For home loan amounts over Rs. 30 lakhs, the interest rate offered is 8.00% for the first year and 9.50% for the 2nd and 3rd years of the loan repayment period. This scheme is valid till September 30, 2009.

Under Punjab National Bank's (PNB) Festival Season Bonanza Offer 2009, home loans of upto Rs. 30 lakhs will have an interest rate of 8.50 is fixed for first 3 years only. After 3 years, interest rates will be based on bank's BPLR will be applicable. Full waiver of processing fees and documentation charges are also applicable under this scheme. This scheme is valid till October 31, 2009.

United Bank of India's special home loan scheme offers an interest rate of 8.25% fixed for first 5 years for a loan amount of upto Rs. 5 lakhs. The interest rate offered is 9.00% fixed for loan amounts between Rs. 5 lakhs and Rs. 20 lakhs for first 5 years of loan repayment period. The rate of interest shall be reset after 5 years & the borrower will then have the option for going for a Fixed rate or Floating rate of interest. This scheme is valid till December 31, 2009.

Punjab and Sind Bank has also announced a special housing loan scheme valid till December 31, 2009. Under this scheme, home loans of upto Rs. 20 lakhs will have an interest rate of 8.25% valid for first 2 years only. Years 3 to 5 years will have a fixed interest rate of 8.50%. Interest rate from 6th year onwards will be BPLR-2.50% with a floor rate of 10.00%. A lower margin of 10% is set for housing loans upto Rs. 5 lakhs and a margin of 15% for loans between Rs. 5 lakhs and Rs. 20 lakhs. No processing fee is to be charged for loans upto Rs. 20 lakhs and no prepayment charges are to be levied.

Oriental Bank of Commerce is also offering a special home loans package until December 31, 2009. Under this scheme, home loans of upto Rs. 5 lakhs will get a fixed interest rate of 8.50% for first 5 years. Home loans between Rs. 5 lakhs and Rs. 20 lakhs will have an interest rate of 9.25% fixed for first 5 years. For repayment years above 5 yrs and upto 20 yrs, interest rates will be decided after the 5th year of repayment based on Indian Banks Association (IBA) guidelines at that time.

Union Bank of India also has a special home loans scheme under which you can get a fixed interest rate of 8.50% for the first 3 years of your loan for loans upto Rs. 50 lakhs. For loans above Rs. 50 lakhs, you can get a fixed rate of 9.25% for the first 3 years of your repayment period. After the first 3 years, the loan interest rate is linked to the bank's BPLR.

Bank of India offers a fixed rate of 8.50% for loan amounts of upto Rs. 5 lakhs for the first 5 years. The interest rate is 9.25% fixed for first 5 years for loans between Rs. 5 lakhs and Rs. 20 lakhs. The interest rate after 5 years will be set by the bank based on its BPLR.

South Indian Bank has a SIB shelter scheme under which loans of upto Rs. 30 lakhs have a rate of interest of 8.50% fixed for first 18 months. Rate of interest for next 18 months is 9.50% fixed. Rate of interest for balance period of payment is then prevailing housing loan interest rate of the bank for housing loans upto and including Rs. 30 lacs. At the end of 3 years, switchover to rate of interest – fixed or floating – shall be allowed without any switching charges.

For loans above Rs. 30 lakhs, South Indian Bank is offering a rate of interest for first 18 months of 9.00% fixed. Rate of interest for next 18 months is 10.00% fixed. Rate of interest for balance period of payment is then prevailing housing loan interest rate of the bank for housing loans above Rs. 30 lacs.

Bank of Baroda's special housing loan scheme offers an interest rate of 8.50% fixed for loans amounts upto Rs. 5 lakhs and an interest rate of 9.25% fixed for loans amounts between Rs. 5 lakhs and Rs. 20 lakhs. The above rates are for the first 5 years. The rate of interest shall be reset after 5 years from the date of drawal of the first installment and borrower will then have the option for going for a fixed rate or floating rate of interest.

Dena Bank offers a festival season home loan scheme where home loans below Rs. 30 lakhs get an interest rate of 8.00% fixed for first and second years. Interest rate of 9.50% is fixed for years 3 to 5 of loan. The borrower will have option to choose either fixed or floating rate of interest from sixth year onwards. For loans above Rs. 30 lakhs, interest rates will be fixed at 8.50% for first and second years and 9.50% for years 3 to 5 of the loan repayment period. These rates will be applicable to new housing loans availed from 14th September 2009 to 30th November 2009.

Vijaya Bank has announced a festival season offer valid from 14.9.09 to 15.01.2010. For loans upto Rs. 30 lakhs, interest rate of 8.00% is offered for first year, while second and third years will have an interest rate of 9.25%. For years 4 and 5, interest rate will be 9.50%. For years 5 to 20, interest rate will be based on BPLR with a minimum of 10.00%. For loans above Rs. 30 lakhs, interest rate of 8.50% is offered for first year, while second and third years will have an interest rate of 9.75%. For years 4 and 5, interest rate will be 10.00%. For years 5 to 20, interest rate will be based on BPLR with a minimum of 10.50%.

Syndicate Bank's special loan scheme offers an interest rate of 8.25% is applicable for first 2 years for loans upto Rs. 30 lakhs. Interest rate is 8.75% for 3rd to 5th years. Interest rate from 6th year onwards is PLR-2.50% subject to a minimum of 11.00%. For loans above Rs. 30 lakhs, the interest rate is 9.25%for first 2 years. Interest rate is 9.75% for 3rd to 5th years. Interest rate from 6th year onwards is PLR-2.00% subject to a minimum of 11.50%. This scheme is valid till March 31, 2010.

State Bank of Bikaner and Jaipur has a scheme where the interest rate for the first year is 8.00%. Interest rate for years 2 and 3 is 8.50% for loans upto Rs. 50 lakhs and 9.00% for loans above Rs. 50 lakhs. Borrower has the option of choosing a fixed rate or floating rate option for repayment periods after 3 years at the time of loan sanction. This scheme is valid till November 30, 2009.

To get the best home loan interest rates in India, you can always visit Ratekhoj's home loan interest rate comparison page. To get your Equated Monthly Installment (EMI) numbers for a particular interest rate you can use our loan EMI calculator.