Deal with the Problem
There are two ways to deal with the problem of differential rates. One, you can switch the loan to a bank offering a lower rate. This is easy now as prepayment penalty on floating-rate home loans has been abolished. The new bank will charge only a processing fee of 0.5 per cent to 1.00 per cent of the outstanding loan. Some banks may even waive the fee if you bargain hard. Two, you can switch to the lower rate being offered to new customers by paying a small fee. Most banks offer this facility to retain customers.