Refinance your home loan, save Rs eight lakh
Rates of interest have lastly cooled off a bit, with the RBI bringing down the CRR and repo charges lately. Some banks have already introduced fee cuts on loans and few others are following swimsuit.
So, does it make sense to refinance your present residence mortgage? Will it assist you save important cash by closing your excessive value dwelling mortgage and shifting to a different financial institution that offers a decrease rate of interest?
I had taken a house mortgage of Rs 9 lakh from ICICI financial institution in November 2004, at a 7 per cent floating rate of interest for 20 years. Since then, rates of interest have gone up significantly. Now, my Equated Month-to-month Instalment (EMI) has additionally elevated and I’ve a remaining tenure of 23 years. I’m planning to shift my mortgage to State Financial institution of India (SBI). They’ve supplied virtually the identical EMI and for a 15 12 months tenure. Ought to I shift?
In 2004, the rate of interest was 7 per cent and in 2008, its round 12 per cent, therefore, the typical rate of interest is round 9 per cent. So, the approximate principal quantity you’d have paid within the final 4 years can be round Rs 70,000. This leaves us with Rs eight.30 lakh because the mortgage quantity that SBI will lend you.
When rates of interest enhance, both mortgage tenure or EMI (or each in some instances) go up. See if one other lender gives you a significantly decrease EMI or tenure, with different facets being kind of fixed. If sure, you then stand to realize with a swap.