Why new home loan borrowers should choose banks over housing finance firms

Existing borrowers of housing finance companies pay a higher interest rate compared to new ones

Something seems to have changed for home loan borrowers, suddenly. After the advent of the Marginal Cost of funds-based Lending Rate (MCLR) system, existing borrowers aren’t suffering so much. 

Consider the example of a home loan borrower who took a home loan of Rs 3 million from State Bank of India (SBI) on April 1, 2016, when the new MCLR system was launched. At that time, he would have paid an interest rate of 9.45 per cent a year. The demonetisation in November 2016 led to a massive drop in interest rates in January 2017 but he got the benefit