With a lower housing loan interest rate, borrowers benefit from smaller EMIs, less interest outgo, cheaper top-up loans, and can even consider a home loan balance transfer for increased affordability. The latest home loan interest rate revision is also bound to add impetus to the home loan market growth in India in the upcoming years.
Here’s how the reduction in the home loan interest rate to 6.90%* is to benefit borrowers.
Lower home loan interest and EMI payments
Home loan EMIs and the net interest payable are directly proportional to the home loan interest rate. Hence, securing the lowest home loan interest rate becomes imperative, as even a difference of 0.10% can add up to sizeable amount of housing loan interest, considering that home loans are of large amounts and are repaid over 20 to 30 years.
The effect of the reduction on the current home loan interest rates is better demonstrated with figures. Consider this table, generated with a home loan interest calculator, with the home loan interest rates today, that is, rates starting from 6.90%* onwards.
| Loan amount | Tenor | Interest rate | EMI | Total interest |
| Rs.50,00,000 | 30 years | 6.90% | 32,930 | 68,54,803 |
| Rs.50,00,000 | 30 years | 7.00% | 33,265 | 69,75,446 |
| Rs.50,00,000 | 30 years | 7.10% | 33,602 | 70,96,575 |
| Rs.50,00,000 | 30 years | 7.50% | 34,961 | 75,85,861 |
| Rs.50,00,000 | 30 years | 8.00% | 36,688 | 82,07,764 |
Borrowers can now take larger home loans
An advantage of low-interest home loans is that borrowers can choose to avail higher sanctions. The reason is that the principal also directly affects the EMI and net interest payable. With a cheaper home loan interest rate, borrowers can balance the two to arrive at a manageable debt-to-income ratio. So, even though the principal increases, the EMI can remain same as the housing loan interest rate has dropped.
The prospects of a top-up loan are attractive
With Bajaj Housing Finance Limited offering Top-up Loans at rates marginally higher than the current home loan interest rates, availing funding over and above the Home Loan sanction becomes viable for many needs. Top-up Loans can be used for personal or business purposes, apart from housing needs, and since the new home loan interest rates start at 6.90%*, existing borrowers can opt for extra funding rather than take a new loan. The home loan top up interest rate available through Bajaj Housing Finance Limited promises to make the endeavour cost-effective.
Easy balance transfer for cheaper home interest rates
Borrowers with other lenders who wish to benefit from the new home loan interest rates can opt for a balance transfer. This facility is ideally more effective during the initial part of the tenor, when EMIs comprise mainly the interest. However, borrowers who have conducted a thorough cost-benefit analysis, accounting for the various balance transfer charges, may switch lenders to enjoy easier repayment.
With customers already being able to claim an annual home loan interest tax benefit and PMAY interest subsidies, the latest home loan interest rate reduction offered by Bajaj Housing Finance Limited adds to the financial incentives offered to prospective homeowners. New customers and existing borrowers on floating rate loans greatly benefit from such home loan interest rate cuts and to avail a Home Loan of up to Rs.3.5 crore customers can apply online today.
