🏦 Difference Between Floating & Fixed Home Loan Rates

✅ 1. Fixed Interest Rate

• The interest rate remains the same throughout the loan tenure.

• Your EMI does not change, regardless of market fluctuations.

• Provides stability and predictability for long-term financial planning.

• Suitable for: Buyers who prefer certainty and don’t want surprises in EMIs.

🔸 Example: If your fixed home loan rate is 9%, you’ll pay the same interest for the full loan period even if market rates drop or rise.

✅ 2. Floating Interest Rate

• The interest rate changes with market conditions (linked to RBI repo rate or lender’s benchmark).

• EMIs may increase or decrease during the loan tenure.

• Usually cheaper than fixed rates in the long run.

• Suitable for: Buyers who are comfortable with some risk and fluctuations.

🔸 Example: If your floating home loan starts at 8.5%, it may reduce to 7.9% when rates fall, or rise to 9.2% if rates increase.

🔍 Key Differences at a Glance

💡 Expert Advice

• If you value peace of mind and stable EMIs, go with a fixed rate.

• If you can manage fluctuations and want to save in the long run, choose a floating rate.

• Some banks also offer hybrid loans — fixed for the first few years, then floating later.