November 12, 2013 11:41 am
I have got my home loan at 9.95% few months back, later the base rate is revised. Will I be paying the old rate or the rate will be revised to all?
Thanks in advance.
Dear. Mr. Chowdary,
Yes, since you have availed a floating rate home loan, there would be an increase in your interest rate when the base rate increases.
Is the interest rate charged on the home loan, fixed, floating or fixed plus floating?
In case of floating interest rate, the rate would be linked to the base rate plus a floating element thereof. So, if the base rate varies the floating interest rate also varies.
In case of fixed interest rate, the market fluctuations would not affect the interest rate and the loan would be divided in fixed equal installment over the tenure.
In case of fixed plus floating, the interest rate charged is fixed for an initial period of time after which it is converted into floating rate. If your loan is currently in the initial fixed interest period then, this increase of Base rate would not affect you.
Thanks for the reply.
This is a Floating Home Loan from SBI taken in the month of August @9.95%.
So, this rate will be raised as the base rate increased right!
You will have to pay as per the new base rate now.
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