Intensifying the competition amongst the home loan lenders, Development credit bank (DCB) and GIC housing are offering home loans below 8 percent level.

DCB is charging a rate of 7.95 percent for loans worth Rs 5 crore at fixed interest rate for first year and floating rates from second year onwards. Praveen Kutty, executive V-P and head, retail banking said "the market would get a further boost if attractive financing options are available".

State-run banks like PNB and central bank of India have waived off the processing and the documentation fee on certain loans.

Bankers say that it is more of a psychological pricing to attract customers, since there is not much difference between 7.95 percent and 8 percent.

"While there has been demand in the affordable home loan segment (up to Rs 30 lakh), the activity in the upper bracket (loans above Rs 50 lakh) has mostly revolved around restructuring or takeover of such accounts by another bank," said VS Reddy, MD, Lakshmi Vilas Bank.

HDFC bank is offering a floating rate of 8.75 percent for loans amounting to 15 lakh , 9 percent for loans ranging from 15 to 50 lakh and 9.5 percent on loans above 50 lakhs. Renu Sud Karnad, Joint MD HDFC said that most of these 8 percent schemes were short duration schemes, between three months and a year. She said that for HDFC home loan was the product, unlike other lenders for whom it might be just one of the products.