The largest lender of the country State Bank of India has decided to pull off its long debated teaser home loan scheme. The scheme will be replaced by a floating rate home loan scheme.

The new scheme will come into play from May 01, 2011. The interest rate in the new scheme will be in the range of 9.5-10.25%.

For loans amounting upto Rs 30 lakh, the interest will be 9.5%. Loans lying in the range of Rs 30-75 lakh will have an interest of 9.75% while hose above Rs 75 lakh will be charged 10.25%.

For customers who have already taken the teaser loan and their loan is still in the initial three year tenor, the old rates would apply now also.

The bank has also withdrawn prepayment penalty charges on home loans.