What Are Fixed Home Loans? A Simple Explanation.

Everyone is on the lookout for a place that meets, if not exceeds, their expectations. Finding a dream home that you can call your own is rare. When you do find it, you wouldn’t want to miss out on the opportunity simply because it doesn’t align with your finances.

In such cases, home loans assist in purchasing ready to move in property or under construction property. Easy monthly instalments allow you to systematically pay for the house without hampering your cash flow.

Most home loan borrowers opt for longer repayment tenures and choose between a fixed loan interest rate or a floating loan interest rate based on convenience.

Fixed Home Loan Interest Rate Meaning

A fixed rate home loan offers a fixed rate of interest throughout the tenure. Regardless of market fluctuations, your home loan interest rate remains constant.

Floating Home Loan Interest Rate Meaning

A floating interest rate fluctuates based on factors like market conditions, economy, and lender policies. RBI regulations or repo rates affect the rate of interest. Home Loan EMI will also change in such an instance.

Also Read: Is Interest Rate Everything in Home Loans?

Should You Opt for Fixed Interest Loan?

A fixed interest rate on a home loan offers several advantages. Here are a few benefits of fixed interest loan -

• Stability & Predictability: Home loan fixed interest rate provides borrowers with a sense of stability and predictability. This means that the interest rate remains constant, allowing borrowers to plan their finances accordingly.

• Independent of Market Conditions: The fixed interest rate is independent of market conditions. This can be highly beneficial, especially in scenarios where interest rates are expected to rise in the future.

• Benefit of Saving: By opting for a fixed interest rate, borrowers can take advantage of potentially lower interest rates during the low interest rate period. This can lead to savings on monthly instalments and overall interest costs, especially if market rates increase.

The table below captures the key difference between fixed and floating interest rate on home loan:

Opt for an ideal interest rate based on your income and risk tolerance. Interest rates profoundly influence EMIs and play a crucial role in effectively repaying a loan. It is, therefore, essential to understand your options and choose one that doesn’t strain your finances.

Also Read: How to reduce interest payment on Home Loan?

Godrej Capital Home Loan

Godrej Capital Home Loan offers home loans for salaried professionals, self-employed professionals/non-professionals (SEP/SENP), and business owners. The home loan comes with various features like EMI flexibility and Parallel funding. The company is also industry-first to offer joint home loan for same sex partners.

Visit home loan page for more details.

Ready to build a house of your dreams? Get home loan for under construction property or home loan for ready to move in property.

Apply online for home loan now

Also Read: Maximising Tax Benefits: Navigating the World of Joint Home Loan Ownership

Disclaimer:

The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially.
The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements.
Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com