How to take advantage of lower mortgage rates
Banks are competing fiercely to win over customers by cutting interest rates, anticipating increased demand in the real estate market over the coming holiday season. Big banks such as State Bank of India (SBI), Kotak Mahindra Bank, Bank of Baroda, HDFC Bank, among others, have cut mortgage rates.
But how can you take advantage of the drop in interest rates? More importantly, is it really worth it?
Experts suggest that it is not always what it seems when it comes to loans. It is best for borrowers to contact their lenders and discuss their eligibility and other conditions attached before switching to a lower interest rate.
It is necessary to understand that more than often, lower rates would only occur if borrowers meet several other criteria as well.
That said, however, borrowers should also take into account the additional costs to be incurred in the balance transfer process, Chaudhary added.
“The new lender will treat the balance transfer as a new loan and, therefore, charge a processing fee, administrative fee, etc. when processing the request. Therefore, borrowers should only benefit from balance transfer if it achieves significant savings on interest charges after taking into account the fees and effort involved.. “
Therefore, potential borrowers should refrain from making borrowing decisions solely on the basis of the prevailing interest rate regime, especially for those considering resorting to variable rate loans, Chaudhary warned.
“Instead, loan seekers should broaden their search for loans and go for the best deal available on their credit profiles. They can prepay loans in the future anyway to lower their interest cost. global, ”he said.
PNB has reduced the interest rate on home loans above Rs 50 lakh from 0.50% to 6.60%. Bank of Baroda offers a 0.25% exemption on existing applicable rates for home loans.
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(Edited by : Ajay Vaishnav)