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Tips-3 Getting a good Home Loan Interest Rate priority

The State Bank of India Home Loan scheme (popularly called the 8% scheme) is very good scheme but surely costs much more than 8% except in the first year. The success of this scheme has ensured that other banks also offer what bankers call 'teaser rate schemes a low initial rate but a higher rate after the first couple of years. Please evaluate the impact on overall cost of such rate changes over the entire loan tenure (typically 20 years). Our interest rate comparison tool gives you the average rate as well as the initial rate to help you understand them better. 

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Tips-2 Getting a good Home Loan Interest Rats

Not only from the perspective of interest rates, but also the eligibility amount it is advisable that you shop around and play one provider against another. A home loan is large purchase decision; 0.2% knocked off your interest rate over a 20 year home loan can typically save you half a lakh! Apart from interest rates, also look out for various fees and charges - processing fees, pre-payment charges, legal fees, valuation fees and other hidden costs. So haggling is worth the trouble. Summon up all your bargaining powers and let banks compete for your business! Enjoy the journey.

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Getting a good Home Loan Interest Rate Scheduled:  

You are better off finalizing your property first and then applying for a home loan. Banks are known to reserve the best deals for immediate disbursement cases as there are targets to be achieved.

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Getting a good Home Loan Interest Rate priority

 First finalize your property, then choose your lender - A common mistake many people make is to take a pre-approved loan before finalizing property. You don't need to take a pre-approved loan to know how much you are eligible for. (Simply use our home loan eligibility calculator if that's all you want to know).  Besides, imagine falling in love with a property and then discovering that the lender you chose will not fund that property due to some legal/document issues.

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Tips-5  Floating Home Loan Rates :  

Under such schemes the initial rate is fixed for a certain period and then the applicable floating rate is applied after a 1-5 year period. This is a good option in the current scenario (November 2010) where interest rates are widely expected to go up. You can compare all teaser rates schemes (including the effective weighted average interest rate) across all providers by following this links depending loans.

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Tips-4  Floating Home Loan Rates :  

For HFCs : The Base Rate Guidelines are for banks, but unless the regulator for the housing finance companies, National Housing Bank comes up with similar guidelines, ironically two of the market leaders, HDFC and LICHF and many others will not be covered by the new regime. Their customer may still be governed under old non transparent regime.

cureent loans

Tips-3  Floating Home Loan Rates :  

The advantage therefore from the consumer's perspective  is that when markets rate soften, obviously new borrowers will not borrow at the same rate as earlier. So if the base rate is fixed at 8%, and bank lends to corporates at Base Rate (8%) and possibly even to existing home loans seekers at Base Rates (8%). When interest rates in the market soften, the banks will be forced to reduce their Base rates as now new customers will not borrow at 8% and banks cannot lend below that rate without reducing their Base Rates. Thus banks will be forced to lower its base rate in response to market forces.

Any reduction in base rates, will automatically apply to the old customer as well as new customers without any discrimination.  

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Tips-2  Floating Home Loan Rates :  

RBI has banned lending below Base rates except limited categories of loans such as employee's loans, loan against its own fixed deposits, Differential Interest rate loans to SC/ST Tribes, etc......

current loans

Getting a good Home Loan Interest Rate Priority

A common mistake many people make is to take a pre-approved loan before finalizing property. You don't need to take a pre-approved loan to know how much you are eligible for. (Simply use our home loan eligibility calculator if that's all you want to know).  Besides, imagine falling in love with a property and then discovering that the lender you chose will not fund that property due to some legal/document issues.

current home loans

Tips-1  Floating Home Loan Rates :  

So even though composition of the base rate from the customer's perspective might continue to remain opaque still it is a better situation than the erstwhile BPLR since the regulator will ensure calculation of Base rate is done in a consistent and fair manner.[......]

current home loans

Tips-1  Current Floating Home Loan Rates :

cute independent

Floating Home Loan rates (also called variable rate loans or adjustable rate loans) - For Banks : The effective rate is linked to the Bank's Base Rate. The base rate would have to be declared by the banks at least once every quarter. It is open to each bank to decide its own methodology for fixing the base rate but it is not allowed to change the methodology after selecting one methodology. The banks will have to document how it has arrived at the base rate and follow the same system consistently. The calculation of the base rate will be open to the RBI for review (which should at least ensure that a set system is actually followed while calculating the Base Rate). This is of course a much better stipulation than  the earlier system of BPLR, where no such system was required to be documented by the bank and there was no question of any calculation that could be reviewed by RBI.

current home loans

Tips-2  Current Home Loan Interest Rates :  

Reset table Fixed Rates:  
Most of the so called Fixed Rates available 
in the market are of this variety. Here the interest rate is fixed for a period of 2-5 years and is then reset for a further period of 2-5 years and so on. These rates are more reasonable than the true fixed rates dealt with above. You just need to be clear about the nature of fixed rate contract you are getting into.