In India banks and housing finance companies to offer dual rate housing loans where interest rates remain fixed for a period of one to five years and then become floating rate.
India’s largest private bank ICICI bank, India’s largest private housing loan company HDFC recently launched dual rate housing loans.
The ICICI Bank scheme allows fixing of home loan rates for a year at 10.5% for loans of up to Rs. 25 lakh, 11% for loans of Rs. 25 lakh to Rs. 75 lakh and 11.5% for loans of more than Rs. 75 lakh.
The HDFC scheme allows only new borrowers to fix their interest rates for loans up to Rs.30 lakh at 10.75% for 3 years and 11.25% for 5 years. For loans of Rs.30 lakh to Rs. 75 lakh, the rate will be 11.25% for 3 years and 11.5% for 5 years, respectively. Borrowers raising more than Rs. 75 lakh will have to pay 11.75% for up to 5 years.
HDFC also offers a fixed rate loan for the whole tenure 20 years at 12.5%.
Mean While leading private bank Axis Bank has gone one step further: it now offers fixed interest of 11.75% for the 20-year loan tenure. In all the cases, the partial or full security of fixed rates comes at a price - the interest rates are higher than the regular floating rate loan offered by the same lender.
Fixed Vs Floating Rate (For 20 Years Tenure, Loan up to Rs. 30 lakh)
These schemes can be even a little attentive, then you can get protection when it is needed rather than start paying for unwanted protection from today.
However, if protection at any cost is the more expensive full protection (20 year fixed rate home loan) where the protection is likely to come in handy at least a couple of times over that period rather than a relatively less expensive three or five year.
According to interest rate experts , ‘Do not go dual rate housing loans or fixed rate home loan. Because, the difference between fixed rate and floating rate is more expensive. In Indian, inflation is still high. But, interest rates may not go up further. Because, Crude oil price, metal prices are coming down. So, the inflation of India comedown soon. So, wait time. otherwise select normal floating rate home loan interest rate"said
Home loan seekers, beware of these Fixed loan schemes.
India’s largest private bank ICICI bank, India’s largest private housing loan company HDFC recently launched dual rate housing loans.
The ICICI Bank scheme allows fixing of home loan rates for a year at 10.5% for loans of up to Rs. 25 lakh, 11% for loans of Rs. 25 lakh to Rs. 75 lakh and 11.5% for loans of more than Rs. 75 lakh.
The HDFC scheme allows only new borrowers to fix their interest rates for loans up to Rs.30 lakh at 10.75% for 3 years and 11.25% for 5 years. For loans of Rs.30 lakh to Rs. 75 lakh, the rate will be 11.25% for 3 years and 11.5% for 5 years, respectively. Borrowers raising more than Rs. 75 lakh will have to pay 11.75% for up to 5 years.
HDFC also offers a fixed rate loan for the whole tenure 20 years at 12.5%.
Mean While leading private bank Axis Bank has gone one step further: it now offers fixed interest of 11.75% for the 20-year loan tenure. In all the cases, the partial or full security of fixed rates comes at a price - the interest rates are higher than the regular floating rate loan offered by the same lender.
Fixed Vs Floating Rate (For 20 Years Tenure, Loan up to Rs. 30 lakh)
Bank | Fixed Rate (%) | Floating Rate (%) |
ICICI Bank | 14.5 | 11 |
HDFC | 12.25 | 10.75 |
Axis Bank | 11.75 | 11 |
However, if protection at any cost is the more expensive full protection (20 year fixed rate home loan) where the protection is likely to come in handy at least a couple of times over that period rather than a relatively less expensive three or five year.
According to interest rate experts , ‘Do not go dual rate housing loans or fixed rate home loan. Because, the difference between fixed rate and floating rate is more expensive. In Indian, inflation is still high. But, interest rates may not go up further. Because, Crude oil price, metal prices are coming down. So, the inflation of India comedown soon. So, wait time. otherwise select normal floating rate home loan interest rate"said
Home loan seekers, beware of these Fixed loan schemes.
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