There are many schemes available to pay the monthly instalments as home loan repayment when you avail home loan for a certain period of time. Generally, the monthly instalment paid during the early part of tenure is the interest and the payments made during the later part of the tenure is the principal. Now, under different schemes you can get home loans at different types of rate. One of them is fixed rate. So, what is a fixed interest rate home loan? I will share the definition of the fixed home loan with you.
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What is a fixed interest rate home loan?
Fixed rate is the type of interest rate which is fixed for the entire tenure of loan. The rate of the loan will not change no matter what the current circumstances. On the other hand we have a floating rate in home loans and the rate changes due to market conditions. Home loans can also be availed on floating interest which is attached to the base rate. One thing I must mention is the floating rate is cheaper than the fixed rate in home loan. The floating rate does not vary much in India. RBI has instructed banks to keep a decent rate so that every customer can avail home loan. Fixed rate also offers some ‘reset clause’ that can have a significant effect on interest rate during market fluctuations. The ‘reset clause’ can be revised any time. Though it depends on the guidelines of the banks and this only happens when there is a sharp hike in the interest rate.Some of the bank offering FIxed Rate home loans:
- HSBC India
- HDFC Bank
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Authors Of The Question
What is a fixed interest rate home loan?
Amrita
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2022-06-20T11:15:01+00:00 2022-07-04T09:17:02+00:00Comment
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