Whether you’re building your dream home or need to refinance an old house, there are many ways for you to save money and take advantage of low home loan interest rates. Find out in this post five simple techniques that can help you get a better rate on your mortgage!
Choose a Shorter Term
The first way to reduce the interest rate on your home loan is to choose a shorter term. A shorter time means you will have to repay the loan over a shorter period. This will reduce the amount of interest that you will have to pay.
Comparison of Interest Rates Online
One way to reduce your home loan interest rate is by comparison shopping online. Websites like bankbazaar.com, and moneycontrol.com allow you to compare the interest rates of different lenders. This can help you to find the lowest interest rate possible.
Make a Larger Down Payment
Making a larger down payment on your home loan can help to reduce your interest rate. This is because you will be borrowing less money, and therefore the bank will see you as less of a risk. Larger down payment will also mean that you have more equity in your home, which can give you a lower interest rate.
If you can, try to make a down payment of 20% or more on your home loan. This will help reduce your interest rate. You may also pay points upfront to get a lower interest rate. Points are fees you pay upfront for a lower interest rate which can be a good option if you plan to stay in your home for a long time.
Revise Your EMI
Revising your EMI is one way to reduce your home loan interest rate. If you have the ability to pay more each month or year, you can ask your lender to recalculate your monthly payments. This will reduce the amount of interest you pay over the life of the loan.
Do not Skip Payments
If you want to reduce your home loan interest rate, one of the best things you can do is to avoid skipping any payments. Making a payment on time shows your lender that you are reliable and committed to paying off your loan. This can help to give them confidence in you, and as a result, they may be more willing to offer you a lower interest rate.
It is worth noting that the equated monthly instalments (EMIs) for your home loan consist of two parts: the interest charged on the borrowed sum and the principal amount. An easy way to reduce the interest you pay on your home loan would be to pay more every year if possible. Remember, the faster you pay your principal amount less interest the bank will be able to levy on it.
We hope these tips have helped you learn how to reduce your home loan interest rate. Following these simple tips can save you a lot of money in the long run.
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