Home loan rate Fixed or floating

POSTED BY Gaurav Khurana ON August 12, 2013 11:52 am COMMENTS (6)

I am planning to take a home loan of about 50 Lakhs. PNB is offering me a fixed ROI (10.5%) for 10 years and floating thereafter. SBI/BoB and all the other banks a floating rate of 10.25%. The loan duration will be 20 years but I intend to return the loan in less than 10 years. Which one would you think will be a better option.

6 replies on this article “Home loan rate Fixed or floating”

  1. Dear Gaurav, in my above example, if paying 30K mly means you ‘ll close loan in 20Y, how much you w’d pay more to close it in less than 10Y?

    Thanks

    Ashal

  2. Gaurav Khurana says:

    Dear Ashal,

    I did not understand your question

  3. Dear Gaurav, how ‘ll you close loan early, if for example your EMI is 30K Rs. for a 20Y loan?

    Thanks

    Ashal

  4. Gaurav Khurana says:

    Mohit: The penalty of 2% is there but only if we pay back more than 25% in a single year.

    Ashal: I don’t have any reason, just that I thought I should be able to close it down in less than 10 years. Is there any drawback of closing down the loan before the actual period other than I would have already paid most of the interest by then?

  5. Dear Gaurav, why do you want to close the loan in 10Y?

    Thanks

    Ashal

  6. Mohit Pandey says:

    Gaurav, check with the bank whether the penalty is there for part payment or Clouser (balance transfer) if you opt for fixed rate which is usually 2% of the amount paid. So please calculate this penalty amount if you are planning to close the loan in less than 10 years.

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