1. The fixed rate of interest on a home loan is usually higher than the floating rate by 1-3%, which is why most borrowers veer towards the latter.
2. However, if financial discipline is your weak point, opt for a fixed rate loan as everything is set in concrete – rate, EMI and tenure.
3. In case of a floating rate loan, the interest rate fluctuates with the changes in the RBI’s policies, which could be a problem if the rates continue to go up.
4. So, if you are getting a low fixed rate, opt for such a loan.
5. However, find out the number of times that the floating rate has changed in the past 3 years, and if you find a steady hike, opt for a floating rate loan as the rates are bound to come down in the long run.