Purchasing a house you can call yours is a dream for several individuals. However, this wish typically comes at a significant price. While you may have been saving for it, this may not be sufficient with the rising real estate prices. However, in your journey of owning a house, a Home Loan is an imperative financial product. It bridges the gap between the cost of your dream home and your savings. It also provides tax benefits.

When opting for a Housing Loan, you should know that its interest rate plays an important role in your monthly outgo and the Loan costs. There are many ways to reduce the interest rates. Let us understand the reasons for considering a lower Home Loan interest rate and explore different strategies to decrease it.

Reasons to get a lower Home Loan interest rate

A lower interest rate on your Home Loan is essential for multiple reasons. These include:

·         It makes managing and clearing off your debts easier when the interest is lower.

·         A lower interest rate results in smaller EMIs. This makes it easier to manage your monthly expenses.

Ways to avail yourself of lower Home Loan interest rates

Some of the ways you can decrease your Home Loan interest rates include:

·         Pick a floating interest rate

The interest rate is the cost of borrowing money from the bank. Two common Home Loan interest rates include floating and fixed interest rates. The former remains unchanged throughout the Loan tenure. On the other hand, the floating interest rate changes based on market conditions. Floating interest rates may be lower than fixed rates. This makes them cost-effective in the long run.

However, you should know nothing is certain, and interest rates could fluctuate. If they do, you might end up paying a higher sum.

·         Make a higher down payment

When you make a higher down payment, you borrow less money. This leads to a lower interest rate and equated monthly instalments. Consequently, make a higher down payment. This lowers your overall Home Loan interest rate.

·         Increase credit scores

This score is the most crucial element banks typically check when determining the Home Loan interest rate you need to pay. The higher the score, the lower the interest rate. This makes it essential for you to maintain a good credit score.

·         Transfer your Home Loan

Suppose you have been repaying your Home Loan for a few years and have a good repayment history. In that case, you can think about transferring the Loan to a bank that provides a lower interest rate.

Conclusion

By getting a lower interest rate on your Home Loan, you can save money over the repayment tenure. So, if you want to reduce the interest rate and make your Loan more affordable, you can check these ways.