Banks cut lending rates: Here's why shifting home loans isn't cheap

If gains are spread over four-five years, it really does not make sense to switch

Whenever banks or housing finance companies (HFCs) cut interest rates, there is an immediate interest among existing borrowers who want to know if it is a good time to shift their home loans. With calendar year 2017 starting with significant rate cuts from leading banks and HFCs, many are excited as the new rates look quite different — 40 to 50 basis points (bps) lower — than their existing loan rates. 

Currently, State Bank of India (SBI)’s rate is the cheapest at 8.65 per cent for loans up to Rs 75 lakh. ICICI Bank and HDFC’s rates are 5 bps