No Relief for Existing Home Loan Borrowers

When it comes to increasing home loan rates, banks follow an across-the-board policy and hike rates for all and sundry debtors. However, the policy is aimed to benefit new borrowers only as lenders (Banks and HFCs).

On Sunday April 1st, the Canara Bank cut home loan rates by up to 1.75%, while IDBI bank had decreased rates on up to 0.75%. In both the cases, only new borrowers benefit, while the existing borrowers secure with loan terms that exceed 20 years as rates have risen over 250 basis points for several borrowers over last 2 years. Recently, an official in a regulatory agency said that existing borrowers could move to new home loan rates by paying a “reasonable” conversion charge.

Also, an official from RBI said that the existing borrowers with their grievance can approach the bank’s Ombudsman by looking up at the site www.bankingombudsman.rbi.org.in for more details. Moreover, an official from NHB said that uniform practice across the lending community, including the banks, will add further strength and stability to the system.

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