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Which one is an Ideal Home Loan Rates - Floating or Fixed?

· home loan rates

Home loan is the first thing that comes to mind when an individual thinks of buying a new home or adding a property. Home loans are the best way to finance the property and pay back the loan with interest. When it comes to finding the right loan, interest definitely plays a vital role. It is necessary to know about the ideal home loan interest Type and need to gather knowledge on floating or fixed interest rate. Housing loan interest rate definitely decides the amount an individual has to pay in monthly instalment.

Before picking the right lender, it is necessary to know about the housing loan interest rate – fixed or floating. Each of these interests type has its own advantages and disadvantages. Here are a few points that will help to make an informed decision on the interest type.

Fixed interest rate helps to pay a constant EMI over the years and is beneficial if the rate is reset due to any financial conditions. It helps to easily plan to repay the loan in advance and a borrower well knows the exact amount to pay. On the other hand, floating housing loan interest rate changes as per the market dynamics. Due to this change in interest rate this, EMI increases and decreases on a quarterly basis. With this, the borrower enjoys the lower rate in future. The floating interest rate also provides zero charge benefit on part-payment or foreclosure.

When availing a home loan, look for the right lender and consider these points when choosing from the floating or fixed interest rate.

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