Hi,

I have a 4 year old home loan from SBI – Teaser loan with fixed rate for first 3 years.

Currently the home loan is in 4th year with interest rate 11.75% well above the 10.25 interest regime currently ongoing.  I am planning to convert my home loan to the lower 10.25%  rate, for which i will be paying .057% of outstanding amount.  and also i want to prepay a portion of my home loan as i have some surplus left.

Questions:

1. Do i do a partial prepay my home loan first and then apply for conversion to 10.25% or vice versa.

because prepay does not incur any charge but conversion is .057% of outstanding loan amount.

2.  How do i calculate the net interest rate i.e. I will pay the bank @10.25 percent but from this i can deduct the tax benefits for interest payment that i avail interest year. So net interest rate is actually slightly below 10.25!! How do i calculate this, any link will be useful 🙂

Regards