A home loan is a long term obligation. Even though it is a secured debt, home loan interest rates are on the higher side.
It is because most people spread the loan and opt for a longer tenor.
On that note, let’s check out other factors affecting your home loan interest rate besides the tenor in this post. Read on!
Your home loan tenor
The longer is your home loan tenor, the higher will be your home loan interest rate charges. The shorter it is; the more will be savings on housing loan rates. Hence, you should go for a smaller tenor. Yes, it may increase your home loan EMI amount, but you will save on home loan interest rate charges.
Your CIBIL score
The higher your credit score for home loan; the better your chances of enjoying approval at a lower home loan interest rate. On the other hand, if your credit score is lower, your home loan approval chances will go down. Also, home loan interest rate charges will increase. Hence, you should aim to keep your credit score maintained at 750+.
Your home location
The location of your new home that you want to buy also matters when it comes to home loan interest rate charges. If it is at a well-known location with basic amenities, your home loan interest rate will be lower and vice versa. It is because if you default, your lender will be able to liquidate your property.
Your down payment amount
A higher down payment can also help you enjoy a lower home loan interest rate. It is because it makes you reduce your overall borrowable amount. The lower it is, the reduced will be home loan interest rate charges and even EMIs.
Considering these vital tips can help you to avail of a lower home loan interest rate.
Read Also: How do I take out a home loan with a CIBIL score?
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