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Tata Capital > Blog > Loan for Home > All you need to Know about Fixed Interest Rate Home Loans

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All you need to Know about Fixed Interest Rate Home Loans

All you need to Know about Fixed Interest Rate Home Loans

If you are stepping into the real estate market for the first time or searching for your ideal home, you should consider taking a home loan. It is a convenient way to finance a property without burning a hole in your pocket and exhausting your savings.

When applying for housing finance, you will come across terms like fixed and floating rates of interest. It is crucial to understand these loan terminologies and what they entail before applying for the loan, as it can help you make an informed choice. Read further to learn about fixed interest rate home loans in detail.

What is a fixed interest loan?

As a potential borrower seeking housing finance, you will have to choose between two different types of interest rates. The interest rate determines how much EMI you'll be pay over the loan tenure, making it a vital factor to consider.

In a fixed interest loan, the interest rate remains the same, meaning your EMI amount will not undergo any changes throughout the repayment tenure. In fact, fixed home loan interest rates are immune to market fluctuations. Even if there is a massive drop or downward trend in the Indian economy, your interest rates will not change.

Additional Read: Some Factors That Impact Home Loan Interest Rates

Fixed vs floating interest rates

Floating interest rates in housing finance change according to the market scenario, meaning they may increase or decrease during the loan tenure. In contrast, fixed interest rates are a safe choice because they remain constant and provide stability.

Floating interest rates are beneficial as they get adjusted according to the financial trends. Hence, it is better to choose floating interest rates if you are well-versed with real estate knowledge and expect a fall in the rates over time.

However, if you require a sense of security and certainty in your monthly EMIs, a fixed rate of interest is perfect for you. Right from the time of application, you will have a clear idea of your EMIs. This will help you plan monthly finances and follow a budget efficiently. Thus, you will have a certain measure of predictability about your monthly repayment obligations and the interest outflow.

Additional Read: Floating Vs Fixed Interest Rates: Which one to opt while buying a house?

Need help financing your dream abode? Contact Tata Capital!

Although both interest types have their merits and demerits, it is essential to base your decision on your financial condition and budget constraints. Once you have made your choice, you must turn to a trusted lender such as Tata Capital to have a hassle-free application process.

We have a vast network of over 100 branches nationwide and offer both offline and online banking services. If you need assistance in purchasing a house, we can provide you with attractive house finance offerings. Simply log in to our website to check your home loan eligibility and calculate your monthly instalment amount using our home loan EMI calculator.

So, why wait? Apply for a home loan with Tata Capital and realise your dream of owning a house without difficulty.

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