{"id":46012,"date":"2021-12-29T16:01:14","date_gmt":"2021-12-29T10:31:14","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=46012"},"modified":"2023-10-19T16:56:00","modified_gmt":"2023-10-19T11:26:00","slug":"fixed-interest-rate-home-loan-gly","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/fixed-interest-rate-home-loan-gly","title":{"rendered":"What is Fixed Rate Home Loan | How it is Different from Floating Interest Rate"},"content":{"rendered":"\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">With a fixed interest rate, home loans offer the borrower an option to repay the loan amount with fixed monthly instalments for the entire tenure of the loan. And fixed-rate mortgages are independent of the market conditions, i.e., inflation and deflation will not change the rate of interest for these loans. Majorly the borrowers cover their loan repayment with the initial monthly payments and the instalments made, later, service the principal amount of the loan.<\/span><\/p>\n\n\n\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><h2>Table of contents<\/h2><ul><li><a href=\"#h-fixed-interest-rates-for-a-home-loan-by-the-banks\" data-level=\"2\">Fixed Interest Rates for a Home Loan by the Banks<\/a><\/li><li><a href=\"#h-advantages-of-taking-fixed-rate-home-loans\" data-level=\"2\">Advantages of Taking Fixed Rate Home Loans<\/a><\/li><li><a href=\"#h-difference-between-floating-rate-home-loan-and-fixed-rate-home-loan\" data-level=\"2\">Difference Between Floating Rate Home Loan and Fixed Rate Home Loan<\/a><\/li><li><a href=\"#h-the-working-of-fixed-rates-and-floating-rate-home-loans\" data-level=\"2\">The Working of Fixed Rates And Floating Rate Home Loans<\/a><\/li><li><a href=\"#h-important-real-estate-terms-you-should-know\" data-level=\"2\">Important Real estate Terms You Should Know<\/a><\/li><li><a href=\"#h-faqs\" data-level=\"2\">FAQs<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-fixed-interest-rates-for-a-home-loan-by-the-banks\">Fixed Interest Rates for a Home Loan by the Banks<\/h2>\n\n\n\n<ul><li><span style=\"font-weight: 400;\"> The HDFC home loan fixed interest rate ranges between 7.20% to 8.20% per annum, which is set for a period of two and gets revised after the completion of the two-year tenure.<\/span><\/li><li><span style=\"font-weight: 400;\"> Axis Bank\u2019s fixed-rate home loan interest rate stands at 12% per annum.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-advantages-of-taking-fixed-rate-home-loans\">Advantages of Taking Fixed Rate Home Loans<\/h2>\n\n\n\n<ul><li><span style=\"font-weight: 400;\"> The interest rate remains constant even if the market conditions fluctuate.<\/span><\/li><li><span style=\"font-weight: 400;\"> Taking a fixed rate home loan helps in budgeting and long-term planning because one can plan the budget according to the fixed monthly payments.<\/span><\/li><li><span style=\"font-weight: 400;\"> Financial security is offered to the borrowers because of the minimum chances of future risks.<\/span><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-difference-between-floating-rate-home-loan-and-fixed-rate-home-loan\">Difference Between Floating Rate Home Loan and Fixed Rate Home Loan<\/h2>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">In fixed-rate home loans, you do not have to worry about the market fluctuation resulting in an interest rate change. The interest rate remains constant throughout the loan tenure in such kinds of loans. On the other hand, floating rate home loans have variable interest rates that change according to the conditions of the market. Loans that are offered with floating interest rates are associated with the floating element as well as the base rate. Thus, with the changing base rate, the rate of interest also changes. But floating rate home loans are more economical than fixed-rate home loans because though the interest rate is constant in fixed home loans, it is higher than the floating interest rates.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-working-of-fixed-rates-and-floating-rate-home-loans\">The Working of Fixed Rates And Floating Rate Home Loans<\/h2>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">The Reserve Bank of India did come up with a statement where it asked the banks to reduce the rate of interest for all the customers. But the banks decrease the current rate of interest for new customers which are subject to change with market fluctuations. And the existing customers have to pay the interest rate which was initially set for them and does not enjoy the changes in the rate of interest when the market is up. In case, the interest rates are reduced, the EMIs are not altered, only the loan repayment tenure gets modified.<\/span><\/p>\n\n\n\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">Fixed-Rate  loans also have certain clauses which are about the variable interest rate during market fluctuations. But the reset clause is always subjected to modifications and revisions. The conditions of the clause will be according to the bank, but the rate can be changed in case of heavy market fluctuation and a fixed period.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-important-real-estate-terms-you-should-know\">Important Real estate Terms You Should Know<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Written Down Value<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/written-down-value-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Written Down Value<\/a><\/td><\/tr><tr><td>Crowdfunding<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-crowdfunding-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Crowdfunding<\/a><\/td><\/tr><tr><td>National Building Codes<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/national-building-codes-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What are National Building Codes<\/a><\/td><\/tr><tr><td>Building Bye-Laws<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/building-bye-law-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Building Bye-Laws<\/a><\/td><\/tr><tr><td>Construction Loan<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-construction-loan-for-home-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Construction Loan<\/a><\/td><\/tr><tr><td>Benami Property Transaction Act<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/benami-property-transaction-act-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Benami Property Transaction Act<\/a><\/td><\/tr><tr><td>Balloon Payment<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-balloon-payment-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Balloon Payment<\/a><\/td><\/tr><tr><td>Bare Shell and Warm Shell<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/bare-shell-and-warm-shell-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Bare Shell and Warm Shell<\/a><\/td><\/tr><tr><td>Capital Gains Tax<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/capital-gains-tax-ptax\" class=\"ek-link\">Capital Gains Tax<\/a><\/td><\/tr><tr><td>Common Areas in Apartments<\/td><td><a href=\"https:\/\/www.squareyards.com\/blog\/common-area-in-buildings-apartments-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Common Areas in Apartments<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs\">FAQs<\/h2>\n\n\n\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Which loan is the best floating, or fixed?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>It depends on the requirements of the borrower.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Do home loans have a fixed interest rate?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>Yes, if you choose a fixed-rate home loan, you will get a constant rate of interest<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Is a 3% rate of interest good?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>Yes, a 3% mortgage rate is a good one.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>What is a fixed interest rate while buying a home?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\n\n<p>It is the rate of interest that you will have to pay for the entire tenure of loan repayment.<\/p>\n\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\n<script type=\"application\/ld+json\">\n\t{\n\t\t\"@context\": \"https:\/\/schema.org\",\n\t\t\"@type\": \"FAQPage\",\n\t\t\"mainEntity\": [\n\t\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Which loan is the best floating, or fixed?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>It depends on the requirements of the borrower.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Do home loans have a fixed interest rate?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>Yes, if you choose a fixed-rate home loan, you will get a constant rate of interest<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Is a 3% rate of interest good?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\n\n<p>Yes, a 3% mortgage rate is a good one.<\/p>\n\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"What is 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And fixed-rate mortgages are independent of the market conditions, i.e., inflation and deflation will not change the rate of interest for these loans. Majorly the borrowers cover [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":46014,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[216],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/46012"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=46012"}],"version-history":[{"count":8,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/46012\/revisions"}],"predecessor-version":[{"id":57638,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/46012\/revisions\/57638"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/46014"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=46012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=46012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}