Home loans are available at enticingly low rates starting from 6.5 percent, if you are first-time buyer, then this is the right time to avail and enjoy the prevailing lower home loan interest rates. Home loan is a long-term loan that typically lasts 15-20 years. If you don’t do enough research to find the best offer, it can cost you a lot of money.
Each lender has its own set of rules for the types of properties it will finance and the types of borrowers it will work with. Many lenders also offer female borrowers preferential interest rates.
However, you should be aware that the lowest rate is not always available to all borrowers, and it frequently comes with a variety of terms and conditions. Shortlist a few lenders and then begin comparing their terms and conditions to find the best interest rate. Lower interest rates will help you minimise your EMI if you find a suitable lender.
Borrowers with excellent credit score are usually offered the lowest rate, so you should obtain your credit report and compare the best rate available to your credit score. Having a female borrower as a co-applicant can also help you save 0.05 percent on interest. So, if you take out the loan with your spouse, you can get a better interest rate.
The bank’s margin will remain the same for all house loan applicants, but the RBI circular allows banks to charge borrowers a risk premium. The risk premium imposed by the bank is based on how risky you are to the bank, and so differs from borrower to borrower.
Banks are obligated to reset interest rates at least once every three months since leading interest rates are tied to an external benchmark. As a result, any change in the external benchmark rate must be passed on to the borrower within three months of the change taking effect.
How to calculate loan EMI
There are a variety of online calculators available to assist you in calculating your home loan EMI. You can try ET Wealth’s online home loan calculator to download the detailed monthly amortisation schedule of your loan .