Home loan is always the best of financial assistance to sort out your monetary requirements. However, such finance is feasible on both floating and fixed rates which conclusively require your attention when it comes to choosing either of the options for your need. Once a home loan is chosen, considering of choosing appropriate rate is brain-storming decision for most borrowers especially for those who have never been to the experience of obtaining housing loan before. Choosing either of the options, feels like having been embroiled in catch-22 situation.
Typically, situation becomes uncomfortable when people are informed about banks elevating home loan interest rates in India and consequential impact over EMI or equated monthly instalments. Understandably, prospective borrowers deem it prudent choosing fixed interest rate over housing finance so as to fend off situation of paying expensive EMI on the loan borrowed.
Some banks give piece of advice to their customers in regard with choosing fixed rate under such circumstances. It is assumed that fixed rate of interest remains unchanged for the whole repayment duration regardless of any ensuing fluctuation in the rate of interest in near future. Hence, as a borrower, you don’t have to take the tension of increase or decrease in the housing loan interest rate if you opt for fixed rate for the same. However, this might not be the case in actuality as fixed rate is changeable but is subject to particular circumstances.
The article tries to demystify fixed interest rate on the housing finance so as to help you gather more understanding on the subjective nature of interest rate and so you can make an informed decision whether or not to go for such rate.
Virtually all the banks in India revise clause on fixed interest rate on their home loan products especially when it comes to obtaining home purchase loan. The loan agreement papers are clearly substantiated inclusion of 10.5% interest rate on certain amount for the tenure of 15 years. However, individuals should understand about variation of such rate of interest in near future.
Recently, State Bank of India (SBI), the largest banking sector in India, has announced that it has right to revise fixed home loan interest rate after 2 years, and the same thing we experience with Canara and Corporation banks which articulated the same revision of interest rate after 5 years. Decision of such banks have also created domino effect of other non banking financial corporations and private banks revising their loan terms on housing finance in India.
Therefore, you should go for fixed rate providing you are ready to accept bank’s condition for a change in the rate of interest in future.
Home loan can give you great financial assistance to sort out your housing project. However, you should understand whether to go for fixed or floating home loan interest rate. The fixed rate is not supposed to be fixed as some lenders tend to change it as per their own terms and conditions.
Typically, situation becomes uncomfortable when people are informed about banks elevating home loan interest rates in India and consequential impact over EMI or equated monthly instalments. Understandably, prospective borrowers deem it prudent choosing fixed interest rate over housing finance so as to fend off situation of paying expensive EMI on the loan borrowed.
Some banks give piece of advice to their customers in regard with choosing fixed rate under such circumstances. It is assumed that fixed rate of interest remains unchanged for the whole repayment duration regardless of any ensuing fluctuation in the rate of interest in near future. Hence, as a borrower, you don’t have to take the tension of increase or decrease in the housing loan interest rate if you opt for fixed rate for the same. However, this might not be the case in actuality as fixed rate is changeable but is subject to particular circumstances.
The article tries to demystify fixed interest rate on the housing finance so as to help you gather more understanding on the subjective nature of interest rate and so you can make an informed decision whether or not to go for such rate.
Virtually all the banks in India revise clause on fixed interest rate on their home loan products especially when it comes to obtaining home purchase loan. The loan agreement papers are clearly substantiated inclusion of 10.5% interest rate on certain amount for the tenure of 15 years. However, individuals should understand about variation of such rate of interest in near future.
Recently, State Bank of India (SBI), the largest banking sector in India, has announced that it has right to revise fixed home loan interest rate after 2 years, and the same thing we experience with Canara and Corporation banks which articulated the same revision of interest rate after 5 years. Decision of such banks have also created domino effect of other non banking financial corporations and private banks revising their loan terms on housing finance in India.
Therefore, you should go for fixed rate providing you are ready to accept bank’s condition for a change in the rate of interest in future.
Home loan can give you great financial assistance to sort out your housing project. However, you should understand whether to go for fixed or floating home loan interest rate. The fixed rate is not supposed to be fixed as some lenders tend to change it as per their own terms and conditions.
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