Home loan rates: should you switch to a lower-rate lender?

On a 50 lakh rupee loan with 15 years left, a 0.5 percent lower rate saves about 2.2 lakh rupees in interest. Fees and legal costs bring the net to about 1.8 lakh (sample).

Switching costs are processing fees of about 0.25 to 0.5 percent of the outstanding amount, plus legal and valuation charges. The break-even point is usually 18 to 24 months.

Before you move, ask your current lender for a rate match. Many will reduce your rate by 0.2 to 0.4 percentage points if you ask. Figures are samples.

This is a demo story: every name, place, organisation and figure in it is fictional.