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Buying a home is a dream that everyone wants to fulfil in the shortest possible time. Since buying a home involves a big investment, buyers opt for loan to fulfil their dream.
The fall in interest rates, especially due to covid-19, has increased the eligibility of borrowers as it reduces their monthly outgo. Borrowers are, however, choosing to use the lower cost to repay loans and opting for shorter durations.
According to Magicbricks’s survey, home loan buyers prefer taking loans for a shorter duration of up to 10-15 years. Twenty-six per cent preferred 10 years for a home loan, 25% opted for 10-15 years, 23% went for 15-20 years. While the rest said that they would like to take a loan for more than 25 years.
“With average home loan interest rates hovering between 6.65-6.90%, borrowers now want to repay their mortgages as fast as possible,” said Sudhir Pai, CEO of Magicbricks. As the borrowers have to pay less interest on the total value of the loan is taken for a shorter period.
Home loan interest rate is a major factor that influences the total cost of your house borrowing. Hence, here is a list of the cheapest home loan interest rate for you:
Effect of changes in home loan interest rate:
You cannot control the interest rate on your home loan as the RBI decides to change the interest rates on a bi-monthly basis, which in turn affects the interest rates that your lender charges you on your home loan. When the interest is reduced, you’ll pay out less in interest while repaying the loan. When the interest rate increases, you pay a higher amount of money in interest. Typically, the lender provides you with the option of maintaining the EMI and decreasing the tenure, as required.
If the interest rate falls, you do not need to change anything because the lower interest rate will benefit you. However, your dilemma arises when the home loan interest rate increases. Then, you will have to pay more interest because your interest will not be the same as it would be if it remained unchanged.