Home loan are long tenure loans of up to 30 years and hence, you are bound to spend a large amount your income in servicing it. Home loan interest rates matters as more than 50% of your home loan EMI component is loan interest amount you pay to the bank during the loan tenure. The current interest rates on home loan ranges from 8.65% to 12.10% with a lowest EMI of Rs. 772 per lakh. You should seriously consider transferring your home loan to another bank, if you feel that interest rate and EMI you are paying on your existing loan is higher than the lowest rate and lowest EMI offers in the market.
Ideally, the benefit of home loan transfer is in the initial 4 to 5 years of loan as you pay the highest interest component in the initial years. Loan transfer in the mid or end of the tenure can work against you financially as you had already paid the higher interest part to the lender. So, before you decide to opt for balance transfer, do a thorough analysis of all savings and costs associated with the transfer of loan
Must watch if you are paying more than the lowest interest rate of 8.65% on your home loan
You can opt for home loan balance transfer if you have outstanding home loan in one bank. Basic eligibility criteria are age, income, employment history and loan to value ratio. Other main eligibility factors which are important for refinance home loan -
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