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How to get the best home loan rate

Updated on: January 30, 2013

In an online chat with readers on January 29, the day when the Reserve Bank of India cut the repo rate and cash reserve ration by 0.25 per cent, Rajiv Raj of answered their home loan queries.

H ere is the unedited transcript.

ravi: Will banks forced to cut there base rate after rate cut?

Rajiv Raj: yes, I expect the bank to cut their base rates post reduction in repo rate today!

DEEPAK: bank never pass rate cut immediately bt increment

Rajiv Raj: It is always ideal to lock your rates to base rates to get the benefits when interest rates come down

Sonal: loan rate cut?

Rajiv Raj: yes we will see softening of interest rates on Home loans shortly

manish: How to lock our rates to base rates to get the benefits for home loans

Rajiv Raj: you can choose while you avail loans on floating rate with any bank

bala: where would it mentioned whether my housing loan is locked with base rate or not? I have taken a housing loan from ICICI bank

Rajiv Raj: You can request ICICI Bank to covert your existing floating rate on base rate of bank, this can be done when you reprice the loan with them

hemant: how much reduction is expected in home loan rate

Rajiv Raj: There is a possibility of 25 basis point fall in interest rate if not more.

Kiran: Will Housing Finance companies Like LICHFL cut rates?

Rajiv Raj: With competition coming from banks even the Housing finance companies such as LICHF will reduce rates to target market.

DEEPAK: Does HDFC bank reduce the loan to base rate. please tell more abt base rate. thnx

Rajiv Raj: HDFC Bank do not offer home loan they source loans for HDFC Ltd which is a housing finance company.

Ashish: where as SBI is now offering 10%, new rate is not applicable on me. they say that I have to pay one time conversion fee

Rajiv Raj: if the base rate of SBI chances you will get the benefit of ROI

Tarun: In a scenario when the rates are cut, builders immediately hike the home prices resulting in no benefit for buyers.

Rajiv Raj: This would depend on demand and supply factor in that market. Few of the market the rates on property are softening or coming down.

Ashish: I have taken home loan from SBI which is on floating basis; I am having an interest rate of 10.25 per cent.

Rajiv Raj: You can check with bank once they announce a cut on base rate for change of rate on your Home loan

manish: are there any charges or fees to convert our base rate as per bank's base rate

Rajiv Raj: Yes banks do charge a fees for conversion.

Kiran: is it better to take a housing loan from banks esp SBI or from Housing Finance Companies

Rajiv Raj: It is better to shop for best options in market

sudhi: Does CAnFin Homes have the option to lock our rates based on base rates

Rajiv Raj: Base rates are maintained by banks not housing finance companies. They would have internal benchmark lending rates.

ghansham: Hi Mr. Rajiv Raj: Very Good Afternoon: Can

you explain regarding CRR, Repo Rate & Reverse Repo Rate

Rajiv Raj: These are certain regulatory requirement which banks need to follow. CRR is the funds that banks need to keep with RBI.

anupam: How much I will be benefited if I take a loan of Rs.40 lacs for 15 years term from Uco Bank?

Rajiv Raj: This will depend on the rate benefit you would get on the loan

How to get the best home loan rate

Updated on: January 30, 2013

vrk: Sir,My home loan from SBI, I am paying floating intrest @ 10 per cent fo rthe last 8 tears. How much intrest rate will reduce in case of mine

Rajiv Raj: The interest rates may fall by 25 basis points due to monetary policy announced by RBI

Vijayakumar: step motherly treatment to the existing customers by not reducing the rates if RBI revises the repo and crr. is it legal

Rajiv Raj: The existing borrower can reprice the loans to avail this benefit.

Ashish: SBI asked me to pay charge (one time fee) to convert loan into new scheme, why is this so as already I have floating loan

Rajiv Raj: Yes there is a conversion fees. if the benefits are higher then it is advisable to opt for the same

jitesh: In my mind, there is no doubt that rates will come down. Banks are now offering home loans at base rate

Rajiv Raj: Banks do offer loans at base rate which will move with RBI interest rate reductions

shakeel: I am an existing customer of HDFC. I am currently paying 12 per cent, Is there any chance of getting reduction in my interest rate.

Rajiv Raj: suggest that you get your loan repriced from HDFC, they may charge a conversion fees

RAJAN: will LICHF reduce roi

Rajiv Raj: I am sure with competition from bank they will do so

Rajesh: is the change in HOME Loan applicable for existing customer also.

Rajiv Raj: Yes if bank reduced the base rate of BPLR

Prashant: I have a home loan from HDFC, will they reduce interest rates?

Rajiv Raj: HDFC Ltd do not follow base rate they have RPLR which is currently 10.25 per cent

Bunty: does it affect the existing borrower? is the precloser allowed now without any extra burdon

Rajiv Raj: If your loan rate are linked to base rate you will get the benefit once base rate of bank moves otherwise you will have to re-price the loan

Venkatesh: Can I get a loan for empty plot through LICHF or any other bank - 7 lacs ?

Rajiv Raj: Banks fund plots but these have to be allotted by any govt agencies. You will have to check the policy with banks

K MURALI: my second disbursement of the new loan is due next week. Will i get the new benefit.

Rajiv Raj: If the rate change before disbursement you will get the benefit.

Bunty: what does the law say on PRECLOSURE OF LOAN

Rajiv Raj: RBI has waived the pre-closure charges for floating rate loan

Sunilkumar: which bank will provide loans on revenue land in bangalore

Rajiv Raj: I am not sure about this they would fund against land provided by government agencies and also have a clause on construction of house

Category: Credit

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