Public sector lender, Punjab National Bank has slashed home loan rates to 8.5% as a festive offer. The new rates are teaser rates to attract more and more customers towards the bank and its product.

The new rate is a fixed one for three years for loans amounting upto Rs 50 lakh.

"Under the offer, housing loans up to Rs. 50 lakh will be available at discounted rate of interest of 8.50 per cent under fixed interest rate option (fixed for three years) across all repayment tenors," PNB said.

Car loans will also experience a rebate. The new borrowers will be able to avail 0.50% discount on car loans in the fixed category. The offer is valid for loans taken between 20th August to 31st December 2010.

Margins of the bank have been reduced to 15% from 25% earlier for home loans upto Rs 20 lakh.

The popular home and car loan schemes of the bank remain unchanged till 30th September.