Compare floating and fixed rate loans side-by-side — find which saves you more over the full loan tenure.
Choose Fixed if you expect rates to rise significantly. Choose Floating if rates are likely to fall or stay stable — and RBI mandates zero penalty on floating-rate prepayment.
Choosing between floating and fixed home loan interest rates is one of the most important financial decisions for a home buyer. Fixed rates offer EMI certainty; floating rates are typically 1–2% lower and historically better over long terms. In India, most home loans are floating rate linked to RLLR/MCLR/Repo Rate.
For most borrowers in 2025: floating rate is recommended. Currently floating rates are 1–2% lower than fixed rates. Over a 20-year tenure, even if rates rise by 0.5%, floating rate borrowers have historically saved ₹5–15L vs fixed rate.
RLLR (Repo Linked Lending Rate) is the benchmark for floating home loans since October 2019. When RBI changes repo rate, RLLR changes automatically. Your home loan rate = RLLR + Spread. Spread is fixed throughout the loan tenure.
RLLR-linked loans: rate changes whenever RBI changes repo rate (typically 6–8 times/year potential change). Banks generally adjust either EMI or tenure — ask your bank to adjust tenure, not EMI, to minimise total interest.
Some banks offer 2–5 years of fixed rate followed by floating rate for the remainder. Good if you expect rates to fall — you lock in current rate, then benefit from lower floating rates later.
Yes, but you'll pay a conversion fee (0.5–2% of outstanding loan). Rarely makes sense unless you expect sustained high rates for 10+ years. For most people, floating is better over the long term.
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