If you are looking to buy the home of your dreams, this may be a good time to invest in a property. Several banks in the country are offering the lowest mortgage interest rates on record. In addition to this, there are also party offers in the form of waiver of processing fees.
To top it off, the Reserve Bank of India (RBI) recently decided to keep key rates unchanged. It has come as a big respite for borrowers amid the ongoing COVID-19 pandemic. However, here we would like to tell you that if you have ever taken out a home loan and paid off your IMEs, we will give you some useful tips to lower the interest rate on your home loan.
Lately, banks are offering lucrative deals with the interest rate on home loans.
How to reduce the interest rate on a home loan
If you switch your loan to a BPLR EBR linked loan, base rate, or MCLR loan, chances are the interest rate will drop with EMI.
When the interest rate drops, customers who have received a variable rate home loan will invariably pay EMI at the reduced interest rate.
Variable rate home loan borrowers have great flexibility to make a partial prepayment without any penalties which they can use to lower their EMIs.
If you think your current lender has a higher interest rate, you may want to consider a home loan balance transfer based on the new lender.
Remember to keep your CIBIL score high and your debt-to-income ratio low. This will help you get a minimum interest rate for a home loan.
If you are facing some kind of financial stress and want relief from reducing your mortgage EMI, consider extending the term of your loan.
Due to the COVID-19 pandemic, if borrowers are having difficulty temporarily paying their IMEs, they can opt for a moratorium from their lender.
A moratorium waives the IMEs or the principal part for a period of time and restructures the loan to an appropriate repayment regime afterwards.