Birla Home Finance today cut interest rates by 0.75 per cent at 8.0 per cent for 1-5 year maturity period, which is the cheapest in the industry.

The 50:50 joint venture between K K Birla group and BHW of Germany reduced the rate by one per cent to 8.5 per cent for 6-13 years loans, company official said on Monday.

The rate for 14-20 years loans have also been cut one per cent to 8.75 per cent.

The rate of interest, calculated at a reducing balance method, would be the same for both fixed and floating rate loans.

The rate cut comes a two weeks after National Housing Bank reduced the refinance rates for housing finance companies by 0.25 per cent on June 3.

Apart from this, the company reduced home loan rates after posting a robust growth of 40 per cent both in loans sanctions and disbursals, Birla Home Finance officials said on Monday.

The company sanctioned and disbursed loans worth Rs 250 crore (Rs 2.50 billion) each last fiscal. Total sanctions stood at about Rs 400 crore (Rs 4 billion) since inception while disbursals were at Rs 325 crore (Rs 3.25 billion).

In view of the high growth, the two promoters -- Chambal Fertilizer and BHW -- infused Rs 25 crore (Rs 250 million) each in the home finance company to raise the capital base to Rs 100 crore (Rs 1 billion).