Floating or Fixed interest housing loan ?

POSTED BY Rajaram ON January 19, 2011 1:44 pm COMMENTS (4)


Am going to take housing loan but in dilema whether to go for a Housing loan with fix or floating rate of interest.

LIC housing Finance offered me fixed floating rate of interest 9.95% for first 5 years and 9.00% for floating rate of interest.

Considering the current market situation which will be the better option. If opted for floating rate how much it will vary in next 5 years ?

Please guide me.








4 replies on this article “Floating or Fixed interest housing loan ?”

  1. Atul says:

    Hi Rajaram,

    Fixed rate is good as of now since you will be able to manage cash flow efficiently.

    With Floating rates and current scenario , your outgoing component will increase.

    When RBI increase interest rates banks follow immediately, however vice versa has delays from bank.



  2. Sud says:

    Cant he take combination of both floating and fixed type loan in some ratio from SBI or other PSU banks?

    1. That depends upon what exactly schemes are being offered by bank at this stage. Banks also keep changing their interest and schemes from time to time. I will suggest to consider SBI as it is transparent and flexible and customer friendly.

      Hope it will help you.

  3. Looking at inflation and Govt. inability to stop it, I think RBI will surely increase interest rates further in near future. Check out with SBI home insurance also, they also offers competitive rates. If possible, try to get the fixed rate of interest offer for longer time frame.

    Hope it will help you.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.