My current SBI Maxgain home loan is based on Base rate (with spread of 0.5), does it make sense to move to MCLR now and increase MCLR spread to 0.8?
My current interest rate is 9.3%, whereas if i transfer loan to MCLR base by paying ~27k processing fee, new rate will be 8.8%. This will save me approx 1450/- per month in EMI, i.e. will take approx 15-20 months to recover processing fee.
But i will be stuck with higher MCLR spread of 0.8, which means when MCLR rate increase in future, my interest rate will also rate higher. To reduce MCLR spread i might have to again pay same processing fee.
So instead of spending of 27k now, does it make sense to wait for one more year e.g. for SBI MCLR spread to come down and then switch loan type?
Better you wait as the interest rate cut season now paused.
Thanks. So you say its not worth to pay 27k for 0.5% interest rate benefit. Do we expect interest rate rise in near future?