A fixed rate of interest is offered on a mortgage by a lender when a buyer opts to make repayments in fixed monthly installments over the entire tenure of the loan irrespective of the interest rate cycle. For those who want certainty in their repayment schedule a fixed interest rate on the home loan can be a great option.
Benefits of opting for a fixed interest rate:
Drawbacks of opting for a fixed interest rate:
As a borrower, you must also cross check with your bank whether you are allowed to fix your interest rate for the entire loan tenure or only for a few years. If you perceive that the interest rate cycle will be on the rise for the next few years, it’s a good idea to be locked under the regime of a fixed interest rate on your home loan.