Key Points:

• Fixed-rate loans provide stability but may have higher interest rates.

• Floating-rate loans have lower initial rates but fluctuate with market conditions.

• Consider long-term financial goals before choosing a loan type.

• Some banks offer flexible loan packages that combine both options.

​

Choosing the right home loan interest rate structure is crucial for financial planning. Fixed-rate loans offer stability, meaning your monthly payments remain the same throughout the loan tenure. This is ideal for buyers who prefer predictability and do not want to risk rising interest rates. However, fixed-rate loans tend to have higher interest rates compared to floating-rate options.

​

On the other hand, floating-rate loans fluctuate based on market interest rates. These loans usually start with a lower interest rate, making them attractive for buyers looking to save on initial costs. However, if the market interest rate increases, borrowers may end up paying more in the long run.

​

For those who want the best of both worlds, some banks offer hybrid loans where a portion of the loan is fixed, while the rest is floating. Before choosing a loan type, consider your financial stability, risk tolerance, and long-term plans. Consulting a financial advisor or mortgage lawyer can help you make an informed decision.