Following its public peer and country's largest lender, Punjab National Bank (PNB) is set to announce ‘festival offer' for home loan borrowers this week.

A senior bank official said, "This will be a part of the festive offering by the bank."

The bank is expected to offer home loans up to Rs 30 lakh at a rate of 8.5 percent for the first three consecutive years. For loans above Rs 30 lakh, the applicable rate of interest is expected to be 9.25 percent, which would be 25 basis points lower than the current rate. On this basis, the loan offer from SBI would be comparatively cheaper.

Recently, banking giant State Bank of India launched a three-month SBI ‘My Home' campaign, timed with the forthcoming festival season in the country.

The benchmark prime lending rate of PNB is pegged at 11 percent which is lowest in the country.

The BPLR of SBI, State Bank Advance Rate (SBAR) is 11.75 percent.

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