State Bank of India and ICICI Bank have already waived prepayment charges, others are expected to follow the trend.
if you are looking to prepay your home loan; it will also work for those looking to switch to a loan that carries a lower interest rate.
RBI had asked banks to cut pre-payment penalties. NHB had says to housing finance companies (HFCs) to cut pre-payment penalties earlier in October. While all HFCs have complied with the guidelines, most banks are reluctant to do so.
Prepayment charges waived off on SBI home loan partial as well as full prepayment, irrespective of the source of the funds. SBI has waived off charges for fixed as well as floating loans.
After SBI, ICICI Bank has waived off prepayment charges on all floating rate home loans for old as well as new customers. “No prepayment charge on floating rate home loan irrespective of the source of fund,”. The bank continues to charge a prepayment penalty of 2% of the outstanding loan amount plus applicable service tax and surcharge on fixed rate home loans. Other banks may soon follow in their track.