Shall I go for lower home loan interest


Dears, I have taken home loan from nationalized bank 4 years ago. My current interest rate is 9.7%

Total Outstanding Principal Amount - 22,00,000
Current EMI - 36,000
Loan Tenure - 20 yrs

Currently bank is offering 8.65% interest rate. But to opt for lower interest rate I have to pay the conversion of charges of 12,000.

Need your suggestion if i have to go head by paying the charges or continue with existing interest rate of 9.7%.

I am looking of for utilities that shows the benefits and your suggestions of pro’s and con’s of it.

Thank you.


Hi Raghu Vamsi,

Check with your bank whether these are one-time charges or whether you need to pay a conversion fee every time you opt for a lower interest rate. You need to consider how much you will save on interest once you take up the new interest rate. However, we find that the loan tenure doesn’t tally with the EMI. If you have an outstanding of Rs. 22 lakhs and a loan tenure of 20 years, your EMI should be only Rs. 20,795 given an interest rate of 9.7%. Can you check your actual loan tenure and get back to us? We would love to help you.

BB Expert