6 practical tips to reduce the EMI of your mortgage
Home ownership is certainly a costly decision to make. Especially when you take out a loan to finance the purchase, affordability begins to play a more critical role. Getting the best NDE isn’t that easy; you need to monitor the status of your loan and make changes accordingly to secure the best possible rate.
Here are six ways to lower your monthly mortgage payments, discussed in detail:
6 Easy Ways To Lower Your Home Loan EMI
Interest rate regimes
Make a partial prepayment
A great way to reduce your EMI is to make a partial prepayment during your tenure. This will help you pay off part of the total loan amount and therefore lower the EMI you pay. Simple techniques like saving your bonuses or additional income in a different way can help you make this prepayment.
Transfer to another lender
Most lenders and financial institutions offer borrowers the option of transferring their loans to other banks or lenders. It’s a great feature that you should be using. The comparison of loan offers from different lenders does not stop once you have received the loan amount. It is essential that you continue to check other interest rates throughout the term and transfer your loan to this lender accordingly.
Extend the term
Fixed and floating rates
You are likely to pay a higher price when you take out a fixed rate home loan. Lenders tend to charge around 1-2% more on fixed rate loans. You can either take out a variable rate loan up front or switch to a variable rate if your lender allows. If your lender has this provision, keep a close eye on variable rates and change depending on it.
Due to the pandemic, many people were faced with financial problems which led to an inability to pay for IMEs. To help, the RBI made a provision for loan restructuring. All you have to do is contact your lender and ask for a restructuring. They will then forgo your NDEs for a period of time and extend the tenure accordingly.
Take all the points mentioned above into account and state how you want to make your loan as affordable as possible. Use a lender who offers these provisions and voila!