Private mortgage lender, HDFC has reduced lending rates for new home loan borrowers by up to 50 basis points, under a floating rate scheme.

The housing finance company has restructured its loan basket to offer home loans up to Rs 15 lakh at a rate of 8.75 percent against the earlier rate of 9.25 percent.

The lending rate on loans between Rs 15 lakh and Rs 30 lakh has been reduced by 25 basis points to 9 percent from the earlier rate of 9.25 percent. Loans exceeding Rs 30 lakh, will be offered at a rate of 9.5 percent from the earlier 9.75 percent.

With the reduced rates in effect, the equated monthly instalment on a loan of Rs 1-lakh loan for a period of 20-years will reduce to Rs 884.

With this rate cut, the gap between PLR and loan rate of the bank has widened.

Recently the bank had also reduced its BPLR downwards 25 basis points to 15.75 percent per annum, with effect from July 20. The revision in BPLR will affect the existing loan borrowers with loans at floating reference rate (FRR) which is linked to BPLR.

Earlier this month, its public peer and country' largest lender, State Bank of India came up with a similar home loan scheme for new borrowers.

In a similar move, LIC Housing Finance launched 'Fix-o-Floaty' scheme for its new borrowers. The scheme as explained by the company, aims to protect borrowers from interest rate fluctuations in the market.