Fixed vs Floating Interest: Which is the Best Option for the Home Buyers?
A fixed-rate interest usually implies when the rate is fixed whereas a floating-rate interest allows one to make prepayments with excess income. You can switch from fixed to floating and vice versa, however, you can be levied with some charges.
To purchase apartments in Bangalore you have to choose the best out of the two by studying some of the pros and cons of fixed and floating rates when buying a home. Keep reading to find out more.
Which one is better? Fixed or Floating Rate of Home Loan Interest
Both fixed and floating interest for home loans have their pros and cons. Here are some of the most important pros and cons of fixed and floating home loan interest:
1. Fixed Rate of Interest
A fixed interest rate on housing loans means that the interest rate does not change over a period. The rate is decided at the time when the loan gets approved and sanctioned by the bank. However, the rate can fluctuate depending on the ups and downs of the country’s economy.
Pros:
● It remains constant or fixed.
● Due to its fixed nature, borrowers or interested home buyers can plan their loan repayments with EMIs.
● You do not have to pay an extra amount on your loan even if the interest rate increases in the future.
Cons:
● They remain constant on home loans even when RBI declares a drop in the interest rate due to government policies. The prior rate of interest remains unaffected and the borrowers have to continuously pay the high payments.
● In case the floating rate reduces, you will have to pay extra since you chose a fixed rate of interest.
● It may also obstruct additional repayments for a certain amount per year.
2. Floating Rate of Interest
This is the kind of home loan interest that keeps on changing or fluctuating depending on the decided rate of interest by the Reserve Bank of India. These rates of interest can be favourable to you when you are sure of the market rates falling in the future.
Pros:
● It is volatile and is unlikely to outdo the interest rate within the period of a loan.
● When the floating interest rate decreases, the interest rate will be less than what is offered by banks or NBFCs. Making it less expensive in terms of borrowing.
● The floating rate of interest may decrease and as a result, the burden of repayment gets lessened consequently.
Cons:
● The floating rate of interest can be unpredictable based on the market conditions.
● It can be difficult to compare different loan offers with floating rates of interest. This is so because they keep fluctuating.
● It is considered to be riskier when taken for a longer period.
Looking for 2 or 3BHK apartment in Electronic City?
To get the most out of all these above-discussed factors regarding home loans you must check out the offers of Mahendra Arto-Helix! They have 2 & 3BHK flats in Electronic City which is a premium residential project in the Electronic City, Bangalore. This is your ideal destination when it comes to buying residential property.
Built on 3.75 acres of land, these incredible apartments in Bangalore consist of various amenities like inbuilt parks, jogging tracks, a swimming pool, proximity to top IT sectors, etc. Also, landscaped gardens and an outdoor sports arena are available which will only add more comfort to your life.
Also, along with 2 BHK and 3 BHK apartments they have penthouse facilities. This can be a dream home with enough space along with other fantastic amenities that will give you the utmost feeling of smart living. This RERA-approved project can be your dream house and its breathtaking terrace views will not make you regret your choice.
To book your 2 or 3BHK flats in Electronic City, contact Mahendra Arto-Helix!
