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5 Reasons You May Not Get The Lowest Interest Rate On Your Mortgage

LIC Home Finance has recently lowered its mortgage rates to match its interest rates. Home finance companies currently offer the lowest rate at 6.66%. Previously, the minimum interest rate was 6.9%.

The company is currently one of the most competitive mortgage lenders. Kotak Mahindra Bank and Punjab & Sind Bank offer mortgages at 6.65%.

Mortgage rates are currently very competitive, but here are five reasons you may not be able to get the lowest interest rate.

1. The highest interest rates are for customers with higher credit scores. Different lenders have different credit score criteria. It can be over 750 or over 800. If you don’t have the required credit score, you won’t get the minimum rate. Instead, the bank imposes a risk premium on the minimum interest rate to give you a mortgage.

2. At some banks, the minimum rate is for paid women. For men, there may be an additional charge of 5-10 basis points over the cheapest price offered. One basis point is one hundredth of a percentage point.

3. Some banks offer maximum and minimum loan interest rates 300,000 rupees. For higher amounts, the bank may charge a higher interest rate.

4. Most banks have a list of preferred employers. If your employer is not on the list, the bank may charge a higher interest rate. The minimum rates are usually for paid customers. For business owners, lenders may set different rates.

5. There are also some other parameters as lenders can charge higher interest rates. Some of these include the age and educational qualifications of the borrower, and the age of the property. The younger you are, the better the lender will offer you. Also, if the house you are buying is old, the lender may not only charge a higher interest rate, but also refuse your loan application.

(Do you have any personal financial questions? Send to mintmoney@livemint.com for answers from industry experts)

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5 Reasons You May Not Get The Lowest Interest Rate On Your Mortgage

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