The country's largest home loan provider State Bank of India (SBI) has announced reduction in the home loan rates by 25 basis points (bps) from 8.60 per cent to 8.35 per cent per annum, which will come into effect from Tuesday.

"The largest home loan provider in India has taken a giant leap to give a fillip to the affordable housing. SBI has announced rate cut by 25 basis points to 8.35 per cent per annum. With this reduction, SBI's offering is the lowest in the market," the public lender said here in a statement on Monday.

"The new rate will be effective from May 9," the statement said.

The effective interest rate for all eligible salaried customers will be 8.35 per cent per annum for loans up to Rs 30 lakh. Over and above, an eligible home loan customer can also avail of an interest subsidy of Rs 2.67 lakh under the Pradhan Mantri Awas Yojana scheme.

The interest rates for customers availing a home loan above Rs 30 lakh have also been reduced, it said.

"To supplement the affordable housing push, SBI has also come out with special offerings for construction finance to the builders for affordable housing projects. This will give a dual push both for construction finance and also for home finance for affordable homes," SBI said.

Rajnish Kumar, Managing Director - National Banking Group, SBI, said: "We have seen a steep hike in the home loan enquiries recently and reduction in rates will further help millions of home buyers."

"Individuals can apply for home loans through multiple channels. SBI offers a bouquet of home loan products catering to different sections of the society."