As interest rates are trending down, shifting to a cheaper home loan could result in substantial savings. Monthly repayment installments take a huge chunk of a budget so shifting to cheaper home loan would be beneficial.
Earlier for borrowers shifting loans between banks means applying for a fresh loan and going through the hassles of paperwork all over again. However, banks and housing finance companies are now offering a switching facility from a higher to a lower rate by the same financier for a small fee. Banks usually charge a switching fee of about 50 basis points.
Mr. Harsh Roongta, chief executive officer (CEO), apnapaisa.com says, "Good borrowers can negotiate a lower switching fee, and in some cases the bank may even waive it off."
Interest rate on current home loans is around 10.5 per cent. But this could decrease in the coming months as interest rates are set to fall.