Home loan interest rates have dropped below 7% after a very long time.
Many who bought a home loan last year or in 2020 might have got it at higher rates.
Now, these people can opt for a Home Loan Balance Transfer and shift for a lower interest rate. But in order to shift your loan from the old bank, you will have to either pay a transfer fee and a pre-closure fee.
Since you can face this situation with most lenders in India, will it be a good option to transfer your home loan at lower interest rates?
Let’s find out what will work for you.
- Firstly, you need to realize that Home loan interest rates have come down below 7% for the first time in the past 15 years.
- Apart from this, the property prices have reduced and builders/developers are offering additional discounts/benefits.
- These two positive aspects make it worthwhile for anyone who wishes to buy a new home. But people who already have the best home loan can avail of the interest benefit.
Your only concern will be the fees that will be applicable when you are switching your home loan. You will have to calculate between the saved amount and the cost you are paying to transfer the home loan.
Hence if you are looking to shift your home loan, only do it when,
- The new loan interest rate is lower than your current loan interest rate.
- After transferring the loan, you will save more money than the cost you paid to transfer the loan. This is important –Go for a balance transfer only when you can save a decent amount.
- If not possible, then you can continue with the same lender. You can discuss with the Bank to reduce interest rates or reduce your tenure if you can afford to pay a higher EMI (This will help you save interest money in the long run).
Finally, we suggest that you must calculate the savings before making any decision. If making a part-payment can help you reduce your loan amount and save interest money, then consider choosing this option. Do not take any decision in haste and without any calculations.
If you have any home loan inquiries, you can always visit our website and apply for the best Home loan in India.