Home Loan rates increased again 9.30 (non overdraft SBI)

I think these rates(around10%ROI) will continue for another 2-3 yrs

true

Why regretting now? Those who took loan that time should have known the fact that rates were about to rise.

@mandass your home loan rate would have changed when they changed their benchmark rate last time... that was 15 Feb. 
OR are you saying that they are gonna increase again?

@mandass If your CIBIL score is 750+ (or better 800+), do some checks on the current rates by HDFC Ltd (not bank) & other PSUs... then go to your branch to negotiate. 
HDFC Ltd used to give a pre-approved home loan letter some years back - not sure if they still do so. Check & maybe you can use that to negotiate with SBI to get the special rate which is valid till end of March.

I Guess you have taken the Floating Interest Rate Home Loan and Not FIXED Interest Rate Home Loan.

Which simply means, whenever the RBI will increase the REPO Rate lets say by 25 basis points it will eventually affect your Interest Rate (Floating) Home Loan because 2 years back RBI REDUCED REPO RATE, It means when the RBI needs to pump funds into the system, it lowers the repo rate. Consequently, businesses and industries find it cheaper to borrow money for different investment purposes. It also increases the overall supply of money in the economy and now they are increasing it because REPO RATE has directly relation with Inflation and to control Inflation and many other macro economic factors they are doing it.

one of my friend took loan of Rs.48L at 7% for 20yr before 1.5yr. now rate is 9.5% and payment term left is 42 years. 😬

shraaj wrote:

I Guess you have taken the Floating Interest Rate Home Loan and Not FIXED Interest Rate Home Loan.

Which simply means, whenever the RBI will increase the REPO Rate lets say by 25 basis points it will eventually affect your Interest Rate (Floating) Home Loan because 2 years back RBI REDUCED REPO RATE, It means when the RBI needs to pump funds into the system, it lowers the repo rate. Consequently, businesses and industries find it cheaper to borrow money for different investment purposes. It also increases the overall supply of money in the economy and now they are increasing it because REPO RATE has directly relation with Inflation and to control Inflation and many other macro economic factors they are doing it.

Afai remember for the last 4-5 years, fixed rate Home loans by SBI (or even other banks) had a fixed tenure of 2 yrs only, thereafter it converts to floating rate loan (at a rate more than the normal floating rate loan!).

Banks might try & push for fixed tenors now, but I think home loan borrowers are not as ignorant as they used to be, say 10 years back. So banks might face a hard time if they try to push for fixed rate home loans now.

SBI is cunningly not giving special concessions this month on MaxGain (overdraft loan) & offering concessions only on the normal HL.. so your premium for taking maxgain jumps from 0.40% to 0.80%!! Really bad!

rn09 wrote:

@mandass If your CIBIL score is 750+ (or better 800+), do some checks on the current rates by HDFC Ltd (not bank) & other PSUs... then go to your branch to negotiate. 
HDFC Ltd used to give a pre-approved home loan letter some years back - not sure if they still do so. Check & maybe you can use that to negotiate with SBI to get the special rate which is valid till end of March.

This holds good for new applications. Anyways rate of interest for other banks are anyways higher than sbi

I part payed (majority) actually my home loan account during COVID time(mid 2020-mid 2022) when the rates were low assuming that it will rise in few qtrs down the line. My decision was correct, with new rates my outgo is very minimal and will finish my loan at the end of year 🙂

mandass wrote:

This holds good for new applications. Anyways rate of interest for other banks are anyways higher than sbi

just saw on HDFC ltd site - HL rate starts at 8.50%/8.70% for standard/adjustable loans.

not just for new applications.
If your current HL rate at SBI is, for example, 9.3%... & SBI is giving new HLs at 8.85% (Mar 2023 offer)...& HDFC Ltd or BoB is offering 9%, then you can push & negotiate. No doubt that SBI is a hard nut to crack, but suggest u to try.
Home loan rate switching at the same bank is not a new concept. SBI might charge a small switching fee of maybe 0.1-0.2%, depending on many factors.

Simply tell them - If the bank is not offering the newer lower rate to you (an existing HL customer), you can do a balance transfer to HDFC/BoB to save money.
Remember, even a banking behemoth like SBI has CAC (customer acquisition cost) - logically & commercially, it will make sense for them to hold on to the existing customer at the new rate than to get a new customer at the same rate by paying CAC!! 

rn09 wrote:
just saw on HDFC ltd site - HL rate starts at 8.50%/8.70% for standard/adjustable loans.

not just for new applications.
If your current HL rate at SBI is, for example, 9.3%... & SBI is giving new HLs at 8.85% (Mar 2023 offer)...& HDFC Ltd or BoB is offering 9%, then you can push & negotiate. No doubt that SBI is a hard nut to crack, but suggest u to try.
Home loan rate switching at the same bank is not a new concept. SBI might charge a small switching fee of maybe 0.1-0.2%, depending on many factors.

Simply tell them - If the bank is not offering the newer lower rate to you (an existing HL customer), you can do a balance transfer to HDFC/BoB to save money.
Remember, even a banking behemoth like SBI has CAC (customer acquisition cost) - logically & commercially, it will make sense for them to hold on to the existing customer at the new rate than to get a new customer at the same rate by paying CAC!! 

I guess the rates mentioned above are base rates, aren’t they ?

Means fd rates also increased

senamit520 wrote:

I part payed (majority) actually my home loan account during COVID time(mid 2020-mid 2022) when the rates were low assuming that it will rise in few qtrs down the line. My decision was correct, with new rates my outgo is very minimal and will finish my loan at the end of year 🙂

Should have saved it for fd.. Now fds giving 7.5-8%.. Enjoy loans at 3-4% effectively 😄

senamit520 wrote:

I part payed (majority) actually my home loan account during COVID time(mid 2020-mid 2022) when the rates were low assuming that it will rise in few qtrs down the line. My decision was correct, with new rates my outgo is very minimal and will finish my loan at the end of year 🙂

good decision.. peace of mind during increase in interest rates!

mandass wrote:

I guess the rates mentioned above are base rates, aren’t they ?

HDFC... yes...

YoYoDesiBeat wrote:

Should have saved it for fd.. Now fds giving 7.5-8%.. Enjoy loans at 3-4% effectively 😄

Interest earned is taxable.

When one repays, he not only saves the hl interest amount instantly but also increases hi principle component. Not to mention 30% tax benefits.

All in all it makes no sense to me to invest in fd rather than paying off hl.

If no, help explain with numbers 

shraaj wrote:

I Guess you have taken the Floating Interest Rate Home Loan and Not FIXED Interest Rate Home Loan.

Which simply means, whenever the RBI will increase the REPO Rate lets say by 25 basis points it will eventually affect your Interest Rate (Floating) Home Loan because 2 years back RBI REDUCED REPO RATE, It means when the RBI needs to pump funds into the system, it lowers the repo rate. Consequently, businesses and industries find it cheaper to borrow money for different investment purposes. It also increases the overall supply of money in the economy and now they are increasing it because REPO RATE has directly relation with Inflation and to control Inflation and many other macro economic factors they are doing it.

No bro. They denied for Fixed Rate loan about 2 years ago on Home loan.

YoYoDesiBeat wrote:

Should have saved it for fd.. Now fds giving 7.5-8%.. Enjoy loans at 3-4% effectively 😄

Care to explain ? as your wordings are like our highly respected FM 🤣

@YoYoDesiBeat hpoe you got the math right.