4 Things That You Need To Know About Home Loan Interest Rates
There are two types of people in the world; those who want to own a house and others who don’t want to own a house. If you are one of them then you must be aware of the fact that getting a home loan is not an easy task.
There are a lot of things that you need to take into consideration before applying for a home loan. A home loan can be used as a long-term investment or as a short-term source of income. But, if you don’t know how to get the best interest rate then it is not going to be a good decision for you.
In this article, I will tell you about 4 things that you need to know about home loan interest rates.
Interest Rate
The first thing that you need to know about home loan interest rates is that there are two types of interest rates, fixed and floating. Fixed interest rate means that the rate of interest remains constant throughout the life of the loan. On the other hand, floating interest rate means that the interest rate varies according to the prevailing interest rate on the market.
If you are applying for a home loan, then it is always better to choose a fixed interest rate as it will give you some benefits like the lower monthly repayments. The only drawback of fixed interest rate is that it will increase your total cost of the loan over time.
Rate of Interest
The next thing that you need to know about home loan interest rates is that there are different rates of interest which may vary from 10% to 20%. If you are opting for a fixed interest rate then the rate of interest will be around 12%. If you are choosing a floating rate then you can get a rate of interest ranging from 15% to 18%.
Repayment Period
The third thing that you need to know about home loan interest rates is that there are two types of repayment period, fixed and flexible. Fixed repayment period means that you will pay off the loan in equal installments over a fixed time period. On the other hand, flexible repayment means that you will pay off the loan in equal installments over a flexible time period.
If you are opting for a flexible repayment period then you will get a lower interest rate. If you are choosing a fixed repayment period then you will get a higher interest rate.
Repayments
The last thing that you need to know about home loan interest rates is that there are different types of repayments, fixed and variable. Fixed repayments mean that you will have to make regular payments throughout the life of the loan. On the other hand, variable repayments mean that you can change the amount of the repayment at any point in time.
Conclusion:
These are the four things that you need to know about home loan interest rates. By knowing these things, you will be able to make an informed decision regarding your home loan application.
