Home Loan Refinance: Best time to refinance your housing loan for a lower interest rate

financialexpress.com:

Whenever the lending interest rate increases, it directly impacts the EMIs of loan borrowers. A longer tenure and a bigger loan amount have a greater impact on the overall loan repayments.

For example, if you have a personal loan of Rs 1 lakh with a 1-year repayment tenure and the interest rate increases from 10% to 11% per annum, it would result in an increase in the EMI from Rs 8792 to Rs 8838 i.e., by Rs 46 per month, and the total repayment will increase by Rs 552.

Similarly, if you have taken a home loan, the impact could be bigger. Let us say you have a home loan of Rs 50 lakh for a 20-year tenure and the interest rate increases from 8.5% to 9.5% pa, it would result in an increase in the EMI from Rs 43391 to Rs 46607, i.e, Rs 3216 per month, and the overall payment amount will increase by a whopping Rs 7.72 lakh.

So, it’s essential to manage your big loans carefully whenever there is a change in the interest rate.

Thankfully, after a series of rate hikes in the past 18 months, the repo rate is stable at 6.50% currently and it can be a good time for you to bring your home loan interest rate back to your comfort level. Let’s find out some important ways to do it.

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As the interest rate has remained stable in the last few months and most of the banks have already adjusted their home loan lending rates with the current repo rate, it may be a good time to find out a lender that offers the minimum interest rate on home loan transfers. For example, suppose you have taken a home loan of Rs 50 lakh with a 20-year repayment tenure and your bank is currently levying the interest of 9.10%, while there are other banks offering you the option to