5 things you should know about home loan interest rates.
Home loan interest rates are one of the most important aspects while opting for a housing loan. It’s critical that you go into a home loan well-versed with the details regarding this expense. It may be so that most dread this cost but with the right knowledge, planning, and research, you can easily handle this cost. And to help you do exactly that, this article will highlight 5 things you should know about interest rates that might be useful to your home loan process.
1. This is the best time for home loan interest rates.
The interest rates on home loans have never been lower. You can avail interest rates as low as 8.40% today, something that would have otherwise been unheard of 5 or 10 years ago. So keep it in mind that this is probably the best time to go in for a home loan.
2. There are types of interest rates.
Yes, home loan interest rates come in 3 types. The first is fixed, which as the name suggests, stays fixed throughout the entire tenure of the loan. The second is variable, which changes with rises and falls in the base rate caused due to government policies & market performance. The third is semi-fixed, which is a combination of the first two and stays fixed for the start of the repayment tenures and later changes to a variable interest rate.
Fixed rates are higher but provide you a sense of security & help financial planning as they never change, even if general rates rise in the future. Variable rates start of lower as you bear the risk of higher rates later on, but if the financial expert is too believed, you will actually benefit from lowered rates in the future. Semi-fixed are great if you want a lock a rate for now and predict the rates to drop later on.
3. Women get better rates.
Most lenders provide a slightly lower interest rate for women. Most usually, the difference is not more than that 0.05% here or there. Yet, this slight reduction can mean substantial savings over a 30-year tenure. So, if you are women, you should know, buying your own home empowers you and it also comes at a discount. Even men can avail this benefit by applying for a loan jointly with a female family member or your spouse.
4. Home loan interest rates help you save taxes.
Under section 24 of the Indian Income Tax Act, the interest amount you pay in a year helps you avail deductions up to Rs. 2, 00,000 per year. If you apply jointly, both you and your co-applicant can avail this benefit, in a way doubling the saving from the interest paid.
5. You can lower interest rates mid-way through your home loan.
If you see another lender providing lower home loan interest rates, you can transfer your current lender to that lender through a process called home loan refinance. Some paperwork has to be done and soon you will be paying lower rates; some lenders will also throw-in a top-up loan amount to better the deal.
These are just a few things you should know about home loan interest rates, yet they should be able to help you on your home loan journey. You can look for more information on the internet or consult a financial expert for further guidance.
Good luck and all the best!