Get the right value of your money by calculating interest rates….

Owning a house is one of the biggest financial goals for many people who wish to buy their dream property. Till a few years back, buying a home seemed to be a daunting task for the common man because of huge property rates, tedious process of application and waiting for months for loan approval. Traditional finances were always a costly option in terms of extremely high-interest rates, stringent payment measures with no time flexibility. 

Borrowing from friends and relatives always had a chance of creating a rift in the relation. Thanks to the efforts taken by leading government and private sector banks & finance companies in India who offer home loans under several customized schemes to common masses to buy their dream homes easily. The process of home approval is quite simple as gone are the days when people had to visit branches to collect the form, filling up, attest the copies, submit with demand drafts and then wait for months on home loans approvals.

While availing housing finance, home loan interest rates are one of the most essential elements associated with it. Without sufficient and careful guidance, it may make a big hole in your pockets in the long run. The most important thing for housing finance interest rates is the fluctuation in the rates based on the market volatility. Therefore, a careful consideration has to be done when it comes to avail a loan and the interest rates applicable to it.

Home loans in India can be taken at interest rates as low as 9 to 10% and come under fixed or floating rate basis concept. Under fixed rate loan the ROI remains constant throughout the loan period, while in floating rate loans the ROI is linked to market conditions and may change periodically. They could be linked to the base rate, inflation, or other parameters, each bank selects its own methodology to fix this base rate. These home loan interest rates have to be declared by the bank each quarter. Some leading private sector banks offer loans in the form of adjustable rate of interest loan, Trufixed loan (2 to 3 year fixed rate variant) or Trufixed loan (10-Year Fixed Rate Variant).

The most beneficial aspect of a person starting with a fixed rate is the interest applicable stays almost constant through the payment tenure. Although, it’s revised every 5 years but the margin is more or less the same. You can have a preset mind towards your loan repayment. You can cut down the expenses, save money in advance and keep the repayment at a set mode. 

In case of floating home loans interest rates, the rate depends on the market volatility, inflation and other economical parameters that could impact the home loan policy. Although, there is always a plus point of getting fairly low rate of interest in floating basis, but you will  also have to save for the days of shooting interest rates. Thus, the fluctuations in the financial market are very sudden and volatile for the common person and rapid changes can hold anyone unprepared.

An understanding of what influences current and future fixed or adjustable rate mortgage rates will help you make financially sound mortgage decision. This knowledge can help you take a decision about whether to choose an adjustable over a fixed rate. You can decide when it makes a sense to refinance your home loan structure. The main objective is home loan interest rates should be curbed so that your home loan gets easier on your pockets in the long run.