Tips on choosing between fixed and variable interest rates
Most of us finance our new home with the help of home loans and therefore, it is vital to know about the interest rates and the differences among them. Here is a guide to help you decide a better repayment plan that does not clash with your monthly budget: 1. Fixed Rate of Interest Here, the interest rates will be fixed for the entire tenure of the home loan. This helps in planning repayment ahead as the amount to be paid per month will remain constant. An added advantage of fixed interest rate is that the RBI policy changes on interest rates will not affect the rates belonging to this loan type. The disadvantage of choosing this type is that it includes bank charges that are slightly higher that other loan types and also a drop in general interest rates due to various policies does not let us obtain its benefits as the interest rates remain fixed. 2. Variable Rate of Interest Variable...