With base rate coming into play from 1st July 2010, all banks that have been offering teaser loans would bring a halt to the regime from Wednesday.
June 30 would witness the last day of these loans. State Bank of India, HDFC Bank and ICICI Bank have been offering these loans for a long time.
The largest banks of the country, State Bank of India and ICICI Bank will now price their home loans based on base rate with effect from July 1.
SBI was the first bank to start this scheme. The bank is offering home loans at 8% for the first year, 9% for the next two years and linked to market rates in the subsequent years.
HDFC Bank offers a fixed rate loan of 8.25 % up to March 2011, 9% for 2012-13 and the prevailing rate thereafter.
Old borrowers will be given the option to switch to the new base rate system or continue with the older system of lending.
Bankers are of the view that interest rates on home loans will continue to be competitive since it is a secured loan.