Home Loan Interest Rate
in India is best ever, among the last decade. This clearly depicts; that if a
person wants the home loan or wants to transfer the existing home loan, then
there is a significant opportunity for them to save money. Even a difference of
50bps i.e. 0.5%will lead to the huge difference in saving annually. One can
save a lot by transfer of home loan, as
the person is paying more interest rate on the existing home loan. The demand
and supply for home loan in the retail sector has changed the mindset of both
lenders and buyers. Before availing any loan; normally people ask for the rate
being offered and the options available in the market. This has made the
customer aware to switch from one bank to another banks or NBFC. A minor
variation in the home loan interest rate can lead to massive savings.
Customer acquisition
has increased tremendously with banks, and even customer is much more aware
about the home loan interest rates; that are prevailing in the market. The
decreasing trend in home loan interest rate has changed people’s preference
from fixed to floating. Moreover, the competition is tougher between the loan
providers to acquire more and more customers, even with the shield of 0.5%
difference in the interest
rate.
Some private portals
are giving online comparison in home loan interest rate with proper rate chart
between both public and private sector banks. This has proved fruitful to make
the customer aware about the interest rate trend in the market. The chances of
fooling the customer in term of rates have gone down; because the leverage of
switching from one bank to another bank or refinancing is always available with
the customer.
There is an enormous
difference in fixed and floating interest rate. Fixed interest rate remains
fixed for the whole tenure of the loan, but floating rate will keep on changing
as per the market fluctuations. It means with fixed rate option; the customer
will not get impacted with the fluctuations of the market. However, it does not
mean that the customer will get the benefit of the same. In last 5 months, the
decreasing trend of home loan interest rate has benefitted most of the
customers. The Reserve
Bank of India controls the trend of interest rates in the market. In order to control the inflation, the home
loan interest rate is increased by the RBI. Once the situation gets control;
then the same is reduced. This leads to fluctuations in the market which leads
to change in the interest rate, which is normally known as floating interest
rate.
