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  • How To Choose Between Fixed And Variable Rates Of Interest
    March 22, 2018

    When financing a new home purchase with a home loan, it is vital to learn about the different interest rates and differences among them. This will help decide a better repayment plan that does not clash with the monthly budget.

    Below listed are the differences between a fixed and variable rates of interest.

    Fixed rate

    The interest rates will be fixed for the entire tenure of the home loan in fixed rate loans. This will help plan repayment ahead as the amount to be paid every month remains constant. Another advantage is that the RBI policy changes on interest rates will not affect the interest rates of this loan type. Disadvantages include banks charging a slightly higher rates of interest when compared to other loan types. Also, if there is a drop in general interest rates due to various policies, the benefits cannot be obtained as the interest rates will still remain fixed.

    Variable rate

    Variable rate or floating interest rate means that the interest rates would fluctuate as per RBI policies throughout the tenure of the loan. Banks mostly fix a slightly lower rates for this type and if RBI policies influence interest rate drops, the amount to be paid as interest will also go down subsequently. Not being able to plan ahead for paying interest is a disadvantage of variable rate loans. Also, sudden hikes in rates may put extensive financial pressure on the monthly budget.

    Ladder Kerala, one of the most trusted names in the construction of luxury flats and apartments in Calicut offers premium living spaces in the lap of luxury in their flagship apartment project Ladder Mankav Greens. Offering home loans at an amazing interest rates of 4.99%, the project assists in securing one’s dream home in a hassle-free buying process.