Hello, I have a home loan (so called teaser loan) from Axis bank (total of 9 years) where initial years were fixed interest rate (approx 8.5%) and then floating…
Now (after 4 years) floating interest rate running is actually around 10.75% while bank is still continuin charging 11.25%, (I was under the assumption that bank will auto-apply interest rate whenever it goes down, just like they do it automatically when it goes up)
When asked about reducing 11.25% back to 10.75%, they said you need to pay 0.5% of principal outstanding + S.T.
Isn’t (as per RBI/NHB) no penalty charges shall be there for a case where you moving from higher floating rate to lower floating rate (that too when sticking with same bank and paying from your own sources)?