urgent plz: fixed vs fluctuating interest rates

This query is : Resolved

jassy (Querist)
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06 November 2009 dear experts, one of our client taken mortgage loan at a fixed rate of interest for 15 years. now the bank interest rates has come down below the rate which they took in the past. bank people had told that in order to convert to the fluctuating interest rates they have to pay penality of huge amount.
please tell me is there any other remedy for them in order to avail the fresh rates.

thanx in advance

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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07 November 2009 Pre close the old loan and avail a new loan.

Or approach a new banker and ask him takeover this loan.

Check with your banker whether prepayment charges is applicable. if applicable find out the differnece between savings in interest and outflow of charges.

If gain is more then you can do this exercise.