Existing home loan customers can lower their loan rates

Existing home loan customers can bargain for a lower interest rate, as many banks are expected to pare their rates after the new base rate regime kicks in from July 1.

The banking regulator has made it clear that the existing customers should be given an opportunity, if they desire, to shift to the new transparent base rate system.

Many public and private sector banks confirmed that retail loans are likely to be priced 1-2 percentage poins above the base rate to stay competitive.

This will give existing customers an opportunity to renegotiate rates when the switch the beanchmark for their floating rates to the new base rate from the current prime lending rates. Banks were allowed to lend below their respective prime lending rates, which meant that most of them kept their rates high, denying the customers benefit of declining interest rates.