Will the recent rate cut reduce interest on my existing home loan?

Will the recent rate cut reduce interest on my existing home loan?

Interest rate is the most important component that determines how much you pay for your borrowing. With house loans being the longest-term loans for the majority of borrowers, any change in interest rate has a significant influence on the overall interest payment during the loan’s remaining term.

However, if your loan is more than 5 years old, you should investigate the interest rate regime under which it is now operating. If you have not switched your loan to an external benchmark linked loan, you may be paying a substantially higher interest rate than what lenders are charging on the new external benchmark linked home loan. If you are paying a higher interest rate, you can ask your current lender to move your loan to an EBR-linked loan, for which you may have to pay a small switching fee.