Get a good deal with a home loan

By Annabel Dsouza

There are many ways for existing home loan borrowers to take advantage of historically low outstanding loan rates.

A home buyer who bought their home before the pandemic may feel left out with the feeling that they just missed out on all of those great deals. However, when it comes to a long-term financial commitment like a home loan, it’s never too late to explore ways to reduce debt by negotiating with the current lender or moving your loan account to. a new lender. In its most recent monetary policy review this month, the Reserve Bank of India (RBI) kept the interest rate regime low to boost consumer confidence for a post-pandemic economic recovery. So why shouldn’t current mortgage borrowers take advantage of these low rates?

Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East and Africa CBRE explains, “The RBI’s decision to keep the repo and reverse repo rates at 4% and 3.35 % respectively came at the right time. As loans will remain cheap, we expect residential sales to continue to increase over the next several months. The RBI’s focus on stimulating and sustaining growth through its accommodative stance while keeping an eye on inflation is expected to accelerate economic recovery, as evidenced by the central bank’s expectation of growth by 9.5% in the 2021-2022 fiscal year. Therefore, we are optimistic that this unprecedented growth will bode well for the Indian real estate market.

Key Benefits

A rupee saved is a rupee earned when it comes to a home loan, and with current rates as low as 6.6% borrowers have much to be happy about as long as they are aware of their rights. Even if you borrowed at higher rates that were in effect a few years ago, now is the time to renegotiate the terms of your loan account. Atul Monga, co-founder and CEO, BASIC Home Loan, a fintech The firm advises: “Reduced interest rates benefit homeowners in several ways. First, it lowers the EMI, thus increasing their savings. Second, the balance transfer can also reduce your overall mortgage term if you opt for a reduced tenure period instead of a reduced EMI. Finally, in some cases, your new lender may also offer a top-up loan, which can be used to renovate your home. The process of transferring a home loan balance is quite similar to applying for a new home loan.

Borrowers with a good repayment history can benefit from special rates and discounts when transferring their loan account.

“When you go for the transfer, you can negotiate the terms and conditions of your home loan by citing your payment history and credit score. This can help you get a lower interest rate or better benefits than your current lender.

Not only the profile of the borrowers but the credibility of the lenders is also crucial throughout this process. It’s easy to get carried away when a new home loan provider offers a lower interest rate. However, before initiating a home loan transfer, make sure the new company is credible. It is very important to do a business background check before deciding to transfer your loan, ”shares Amit Goenka, Managing Director and CEO, Nisus Finance, investment advice.


To transfer your home loan, first do the math on your current agreement to see if a transfer will save you a considerable amount of money. “Choosing a new lender for your home loan because they offer a lower interest rate is not the only criterion. Some borrowers transfer their balance if they are not satisfied with the service of their current lender.

However, calculate the overall cost against the savings you will realize after the transfer process. A transfer is advisable if you have become eligible for lower interest rates due to a better credit profile or if you have received a home loan at a much higher interest rate. Also, the balance transfer should be considered at the start of your loan term. Most of the interest component is paid at the start of the term. Therefore, the difference in your NDE will not be significant if you are transferred at a later stage of your tenure, ”observes Monga.

The remaining term of your home loan is a crucial factor when you decide to transfer your loan account. “Opting for the mortgage balance transfer in the second half of your tenure is not worth it. If you get a new loan to pay off your existing loan during the last few years of tenure, you will end up increasing the interest charges on your new loan. The balance transfer process involves processing fees, administration fees, administration fees, inspection fees, etc. Fees will be charged by both the existing lender and the new lender. Find out if the cost of a balance transfer is less than your interest amount. When choosing a lender for a balance transfer, be sure to read the terms and conditions carefully to avoid any hidden charges. Make sure you know what the new bank has to offer in terms of loan benefits, ”Goenka concludes.

Home loan balance transfer process

Step 1: Submit the request to the current lender: Inform your current lender through a form or letter;

2nd step: Accept Letter of Consent or Certificate of No Objection (NOC): Once the application process is complete, the lender issues a letter of consent or NOC, which is an essential document required by the new lender to initiate the process;

Step 3: Provide the necessary documents: Contact your new lender and provide all the essential documents required for the process. After submitting all the necessary documents such as KYC and NOC, you may also need to submit a copy of your loan balance statements, interest statements, property papers and a completed application form;

Step 4: Get Confirmation from Old Lender: Once you have submitted the necessary documents to the new lender, you should wait for final confirmation from the previous lender regarding the closure of your old loan account. This means that the loan contract has ended, including all the conditions that govern it;

Step 5: Pay the required dues and start over: Once you’ve signed a contract with the new lender and paid all pending fees to the previous lender, your home loan transfer process is complete. You can now start paying next month’s EMI to the new lender.

– Amit Goenka, MD and
CEO, Nisus Finance

Documents needed to process a mortgage balance transfer:

  • Letter of consent;
  • Certificate of No Objection (NOC);
  • Loan contract in progress;
  • foreclosure letter;
  • Home loan statement;
  • Property documents;
  • Post-dated checks;
  • KYC documents (proof of identity, PAN card, etc.); Financial documents (Form-16, proof of income, etc.).

Atul Monga, co-founder and
CEO, BASIC Mortgage Loan

– Times property