Even a small reduction in your home loan interest rate can translate into substantial savings over the loan tenure. Here are several ways to bring down your borrowing costs—from maintaining a strong credit score and choosing the right lender to opting for a suitable loan structure. Here’s a look at some effective strategies to secure a lower home loan interest rate.
Here’s look at how you can bring down your home loan rate:
- To secure the lowest possible home loan interest rate, borrowers should focus on maintaining a strong credit profile, ideally with a credit score above 750. A higher score can help reduce the interest rate by around 0.5 to 1 percentage point.
- Additionally, comparing offers from different lenders and considering public sector banks, which often provide more competitive rates than private lenders, can help lower borrowing costs.
- Adding a co-applicant with a strong credit history can improve your chances of securing a home loan at a lower interest rate.
- Lenders also tend to offer more favourable rates to salaried individuals with stable employment and professionals with a consistent income record.
- Borrowers with a strong financial profile should not hesitate to negotiate, as banks often provide preferential rates to creditworthy customers.
- Besides, joint home loan with one of the co-borrower as a woman also helps to secure a lower rate. Women borrowers get up to 0.25% lower rate of interest.
- In contrast to the fixed home loan rates that are offered at a higher rate of interest, opting a floating rate of interest makes more sense in a falling interest rate regime.
Home loan remains unchanged after RBI MPC
On Friday, The Reserve Bank of India (RBI) kept its benchmark repo rate unchanged at 5.25 per cent, and announced a raft of measures to attract foreign capital and support the rupee.
Real estate industry bodies CREDAI and NAREDCO hailed the decision saying a stable interest rate regime would help sustain housing demand.
CREDAI President Shekhar G Patel said RBI policy indicates a calibrated response amidst the current global economic environment. “With geopolitical tensions, inflationary concerns, and currency volatility continuing to influence markets globally, policy continuity will bode well for the real estate sector and help sustain overall market stability,” he notes
Meanwhlie. NAREDCO President Parveen Jain described it as a positive development for both the economy and the real estate sector. “With borrowing costs remaining steady, homebuyers will not face any additional burden on home loan repayments, which should support housing demand, particularly in the mid-income and affordable housing segments,” he added.