Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Fixed rate loan maintains the same interest rate for a specified period or entire tenure, keeping EMI predictable regardless of market rate changes.
Fixed rate means your loan interest stays locked — EMI won't surprise you when RBI changes rates, but you may pay more initially.
True fixed-rate rare for full 20-year home loans in India — often fixed for initial 2–5 years then converts to floating. Prepayment penalties common. Fixed-rate FDs and bonds offer parallel certainty on investment side.
Lock home loan at 8.75% fixed for 3 years while floating peers pay 9.2%. If rates fall to 8%, you overpay until fixed period ends or pay conversion fee.
Pure fixed for full tenure uncommon. Read loan agreement for reset clauses after initial fixed window.
Lenders often charge 2–4% on prepaid amount for fixed-rate loans unlike floating-rate individual home loans.
Fixed typically 50–100 bps premium over floating at origination. Breakeven depends on rate path over loan life.