Buying your desired flat in Rajarhat can become one tiring & complex process – if not having the required awareness about the entire structure of the housing loan scheme.
And, one prime aspect to learn in this context is about:
Kind of interest rate suiting your need
In the Indian market, two options come up to this end,
♦ The Fixed Interest Rate and Floating Interest Rate
Now, as for
Which Home Loan Interest Rate Will Be Ideal For You
learn that
A Fixed Rate of Interest:
♦ Remains constant throughout your loan tenure, regardless of market price fluctuations or changes in Repo Rate
♦ Is perfect to pursue when the EMI scheme is comfortable for you
♦ Helps you to plan a long-term budget for daily & essential expenses after taking a home loan, as you get to know the exact laps of EMI for the entire period
But Be Aware –
◉As unchangeable even when the market rate is higher, fixed interest rates are generally 1.5% to 2% higher than their floating counterparts
◉ Once opting for a fixed rate, you cannot avail any benefit of decreased interest rates – as & when such a market situation crops up
◉ When the market prices are higher than the conventional level, approval for a fixed rate of interest can become difficult; since banks will doubt your capacity of repayment at a higher rate
One Spoiler Alert
Some fixed-rate home loans stay fixed only for certain periods.
Basing on the loan tenure, it can be that your fixed interest rate stays valid for certain years & automatically converts into a floating interest rate loan thereafter.
When that happens, know that the fixed-rate might get revised affecting the EMIs in the long run. Henceforth, as a ground-rule, give a thorough reading to all the T&Cs while getting a home loan to buy flat in Rajarhat.
As For The Floating Rate of Interest
pursue it, when you
◉ Are confused about interest rate fluctuations & prefer to go with the market trend
◉ Wish to save on the overall interest rate shortly; since floating-rate loans are marginally lower than fixed-rate loans, thus reducing your loan cost
◉ Have a backup plan of repaying the loan before the designated tenure & desire to avoid prepayment penalties. The RBI has banned all sorts of prepayment fees in case of the floating interest rate.
However, Realize That
As completely dependent on the market’s flow, floating interest rates are-
Highly unpredictable, possible to increase to an extent that it would become slightly uncomfortable for a borrower to pay their EMIs.
This unpredictability also goes to affect financial institutions, which end up charging higher premiums than the conventional benchmark
Which One To Go For?
The answer to this question solely depends on your financial health & whether predictability or unpredictability is your taste. Still, some factors can help you make a decision:
• Calculate cautiously the EMIs of 2-3 loan schemes you have shortlisted – basing upon both the fixed & floating rates
• Weigh that with own monthly income range & acknowledge the gap
• Can follow the expert advice of Fixed Rate for the 40s & Floating for those in their 20s
• Split own loan between fixed & floating by a 60:40 ratio
We wish you find the apt home loan as per current interest rates & experience the smoothest home buying journey.
As for picking a suitable flat in Rajarhat, connect to Team Realtech anytime & from anywhere.
