| With increasing interest rate, the consumers | | | | Here is another another reason to go with a floating |
| awareness has also increased while taking a home | | | | rate. The cost of floating rates will be lower than a |
| loan. The consumers most often question is whether | | | | fixed rate loans even after hikes in interest rates in the |
| to go for a fixed rate or floating rate for home loan. | | | | market. This is very strong point to consideration. The |
| First it's very important for the consumers to know | | | | fixed rate is always higher up to 7%, if the rates |
| what they meant for? | | | | increases and do not witness hike more than 2%, |
| Under fixed rate scheme, the interest rate stays same | | | | remains still lower. The increased rates are not for the |
| for the entire loan term. It doesn't affected, if the | | | | entire loan tenure, it settles down when market rates |
| interest rate moves up in the market. Fixed rate is | | | | comes down. |
| more expensive than floating rate, but it protects | | | | Today, the banks are introducing fixed + floating rate |
| consumer against constant rate hikes. While floating | | | | home loan schemes to attract the consumers. In these |
| interest rate depends on the current rate of interest in | | | | schemes, the fixed rate is set for a particular tenure |
| the market. If the interest rate moves up, the monthly | | | | which subsequently convert into the floating rate after |
| payment will also increased. | | | | the end of the fixed rate tenure. The rates given in |
| In the current scenario, it is advisable to go with a | | | | these schemes are really lower which is set for the 2 |
| floating interest rate for home loan. Why? The market | | | | or 3 years. After the end of the fixed rate tenure, the |
| research indicates, the floating rates are favorable for | | | | rates are shifted to the prevailing interest rate in the |
| the consumers. It seems more attractive than a fixed | | | | market. Such a schemes are also advisable which |
| rate home loans, because there is no strong sign of an | | | | gives the security of fixed rate and the benefits of the |
| increase in the interest rate. This is why the most of | | | | floating rate. |
| consumers go with a floating rate for home loans. | | | | |