Foreclosure charges for fixed rate home loans

A borrower who pre-closes a home loan taken on fixed interest rate is liable to pay pre-closure charges, a consumer court here has observed.

Dismissing a complaint against the Ernakulam District Cooperative Bank’s refusal to refund pre-closure charges to a consumer, the Ernakulam District Consumer Disputes Redressal Forum headed by president Cherian K. Kuriakose pointed out that an RBI circular issued on June 5, 2012, insisted on banks not to charge foreclosure charges under pre-payment penalties on home loans on floating interest rate basis only.

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