Is it good to change an existing SBI home loan interest at the base rate of 9.25% to an MCLR interest rate of 8.80% with Rs. 7,500 conversion charges?

Ans: Switching from a 9.25% base rate to an 8.80% MCLR rate on your SBI home loan could reduce your interest costs, given a 0.45% rate reduction. This switch is generally worthwhile for a one-time ? 7,500 conversion fee if you have a longer loan tenure, as it leads to more interest savings over time. However, if your loan tenure is shorter, consider if the savings justify the fee. Evaluate potential future rate changes with SBI to ensure optimal benefits from the switch.
By switching from the current interest rate of 9.25% to the MCLR rate of 8.80%, here’s what you can expect:
Current EMI: ?42,819 New EMI: ?41,277
This reduction in EMI would result in total interest savings of approximately ?4.55 lakhs over the remaining 25-year term, after accounting for the ?7,500 conversion fee. Switching could be a good option if you want to reduce long-term interest payments. ?