SHOULD YOU OPT FOR A FIXED RATE OR A FLOATING RATE HOME LOAN?


Are you willing to buy a home that you can call yours? Staying in rent or lease can only provide you a shelter, not security or value. Having your own home has become very essential if you want security and some status in society. With rising value and status, it is a must to have an address that you own for yourself. However, not everyone is blessed with a high bank balance. You can apply for a home loan that can help you deal with your fund issue. The banks and financial institutions offer you a home loan and fund up your home in a certain percentage. However, a home loan comes with an interest rate charged by the loan provider on the amount you borrow. 

 

Go for a fixed rate


A fixed-rate of interest is not subjected to any change or variation. It is a fixed rate of interest and you need to pay a fixed percentage till the end of your loan tenure. The rate is fixed during you take a loan and pay that same rate throughout the term. Even though the market rate changes and conditions fall, you will have to pay the same rate for the years. There will not be any increase or any decrease in the rate. This scheme is perfect for those who want a static EMI with no room for changes. If you are not willing to go as per the market standards, then this is fine for you. 

 

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Go for floating rate


A floating rate is subject to changes and variation. It completely depends upon the market rates and changes. As the market develops or drops, the rate of interest also changes. You start with a rate of interest, but you don’t pay that for the rest of your tenure. It will change, either for good or for less. The floating rates always start with a low rate of interest, and then it can further drop or rise. People who want to follow the market standards can go for a floating rate. Also, if you are going for something dynamic you may end up paying a high rate of interest. 

 

Wrapping up


Apply for home loan and then decide what kind of interest rate you want to go for. Both of them have it’s an advantage, the choice is yours. It completely depends on your needs and preference.

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