Every individual has the will to purchase own house. This is a big decision to make when and how to purchase a home. If you are thinking of purchasing a home with the help of a Home Loan, then there will be various factors that you need to consider. After you take a Home Loan, you have to repay a larger amount that will be a combination of your loan principal, loan tenor and the rate of interest. But, your repayment amount will be majorly dependent upon the rate of interest set by the banks and NBFCs. Usually the Housing Loan interest rates are lower than any other type of loans, as it is a secured loan and you keep your home as a collateral with the lender. However, the rates of a Home Loan are of three types:
Fixed Interest Rate: A fixed interest rate is the common type of interest rate, where the interest rate remains the same throughout the entire tenor of the Home Loan and it cannot be changed.
Floating Interest Rate: Floating interest rate keeps on changing according to the market rates for the entire tenor of loan.
Hybrid Interest Rate: Lenders have introduced a combination of both fixed and floating interest rates and named it Hybrid interest rates. Here, applicants can choose to pay a part of their loan as fixed interest rate and the rest as floating rate of interest.
To know about the other factors related to Home Loan interest rate, read:
Here is How to Repay your Home Loan Efficiently
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.