A series of rate cuts by leading housing finance companies notwithstanding, State Bank of India (SBI) housing loans are still the lowest for most of the slabs. ANZ Grindlays, on the other hand, offers housing loans carrying the maximum interest rates.

The rate war began last month, with GIC Housing Finance (GICHF) pruning the rates applicable for the Rs 25,000-Rs 5 lakh and Rs 5 lakh-Rs 10 lakh slabs by 0.5 per cent each. This was followed by Housing Development Finance Corporation (HDFC) announcing a 1 per cent cut in the Rs 5 lakh to Rs 10 lakh slab-from 14.5 per cent to 13.5 per cent.

Two weeks later, LIC Housing Finance (LICHF), too, announced a one percentage point cut in its Rs 5 lakh to Rs 10 lakh category. The latest entrantin the rate war is the private-sector Dewan Housing Finance Corporation Ltd (DHFC), which announced a one percentage point cut in the Rs 5 lakh to Rs 10 lakh slab (from 15 per cent to 14 per cent) and a half a percentage point reduction in the Rs 2 lakh to Rs 5 lakh slab (from 14 per cent to 13.50 per cent). DHFC's rate cuts come into effect from September 24, 1999.

"The decision to reduce the interest rate was taken to be in line with the competition, and to pass the the benefit of falling rates to the customer," DHFC executive director Kapil Washawan said.

The housing finance rates offered by ANZ Grindlays stand at a flat 15.5 per cent (floating rate) and 14.0 per cent (for the fixed-rate option) on loans less than Rs 10 lakh, while SBI's rates are 12 per cent for loans below Rs 2 lakh, 13 per cent for Rs 2-5 lakh, and 14 per cent for higher slabs.

Earlier, SBI had also introduced a refinance facility for its existing housing loans. This followed similar schemes announced by ANZ Grindlays and Hongkongand Shanghai Banking Corporation (HSBC) to enable customers swap existing housing loans (taken from other banks) with fresh loans from these banks.

SBI has finalised its fixed-rate housing finance scheme. "The scheme has been placed before the SBI committee for approval, and will be launched next month," senior SBI officials said.