Don’t lose this opportunity to switch your home loan and save lakhs

Updated on November 30, 20183 mins read
save lakhs

For home-owners who have been waiting to reduce their home loan burdens, now is the right time. Switch your home loan and you could save lakhs of rupees.

RBI kept its policy rates unchanged in its Monetary Policy Review announcement on 7th April, 2015. However it urged banks to pass on the earlier rate cuts (by 0.25 percentage points each made in January and March 2015) to the customers. With an aim to boost credit growth, the top lenders have now cut their base rates and subsequently their home loan rates.

Following are the reasons why you should Switch or Transfer your Home Loan now:

 

Banks are providing competitive rates on home loans

In the last few days, there have been a series of announcements regarding reduction in home loan rates by the lenders. The home loan rate cuts have been aggressive with the leading lenders clamoring to provide the lowest home loan rate. SBI, HDFC and ICICI currently provide home loans at 9.90%. SBI gives incentive to women borrowers by offering them home loans at a lower rate of 9.85%. Axis Bank provides home loans to their customers at 9.95%. Other banks such as Bank of Baroda, Punjab National Bank, IDBI Bank and Union Bank of India have lowered home loan interest rate to 10.00% while banks like ING Vysya, Bank of India, LIC Housing Finance still have home loan interest rate higher than 10%. As we all know, competition among the lenders works well for a customer.

So, given the above, you should save on your home loan by doing nothing right? The answer is No. Please read further to know why.

 

You don’t get an ‘automatic’ benefit of the home loan rate cut

If you think you are on a floating rate loan (which is linked to the market rates) as opposed to a fixed rate loan (one that doesn’t change during the tenure of the loan), you will still have to formally switch to the lower interest rate within the same bank to get the benefit of the rate cut. Some banks charge some fees for such internal transfer. It may be a good idea for you to consider the other options available and switch to another bank which may turn out to be cheaper!

 

Get maximum savings by reducing your tenure while switching your home loan

Some people may think that a small percentage cut in the home loan rates does not lead to a substantial savings. They come to such (wrong) conclusions by thinking that it may only lead to a savings of a few thousand rupees in EMI.  However the same cut in the home loan rate could lead to savings of a few lakhs of rupees if you reduce your tenure. You should take advantage of the home loan rate cuts by keeping the EMI unchanged and reducing the tenure.

For any information on Home Loan Switch/ Transfer visit SwitchMe or call us: +91 81 08 899 980. Just compare the home loan rates and we will help you get maximum savings. Switch & Save!

Note: All rates mentioned above are as per news reports and banks websites as on the date of publishing this article.

Cheers to a healthy, financially-stable and comfortable life!


8 COMMENTS

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  1. Karthik Thyagarajan
    Nov 16 2015 at 10:54 pm
    Reply

    Hello, my bank ( syndicate) automatically reduced my emi and thereby tenure and total interest increased. When asked they say its automatic. Do they have the right? What exact question or documentation should i ask them?

    • Tarini
      Tarini
      Nov 18 2015 at 1:26 pm

      Hey Karthik

      Looks like the bank has reduced your interest rate, however this will either mean a reduction in EMI or an increase in tenure. A change in both is not possible, please check again. Either way, this is a standard practice across all banks and you have nothing to worry about 🙂

  2. ravichandra
    Oct 07 2015 at 11:57 pm
    Reply

    Our interest rate in mar 2015 is 11.76 % in dhfl bank.can I switch to SBI home loan.if I stay in same bank should I have to switch to a lower interest rate or will be done automatically?

    • Tarini
      Tarini
      Oct 08 2015 at 3:09 pm

      Hey Ravichandra

      Though DHFL hasn’t announced any changes in their rates yet, I’d advise you to switch to SBI as it has a history of offering the lowest rates in the market. Further, if you wish to switch to a lower rate within your bank you will have to pay a processing fee, please contact your lender for more clarification on the same (on whether they will switch to a lower interest rate automatically). I hope this helps 🙂

  3. Santosh
    Apr 16 2015 at 4:33 pm
    Reply

    Hi What is Minimum years to Opt for Home loan Switch over from HDFC to SBI? I took loan on Oct, 2013 wtih HDFC @ 10.35% Can i switch my loan to SBI Now?

    • Priyanka
      Apr 20 2015 at 6:32 pm

      Hi Santosh,

      You can switch your home loan anytime. In fact now is a good time to switch considering the recent home loan rate cuts.

  4. Reena Agrawal
    Apr 16 2015 at 4:00 pm
    Reply

    Informative as well as interesting to read!

    • Priyanka
      Apr 20 2015 at 6:04 pm

      Thanks Reena!