5 reasons why you should opt for home loans with floating interest rates.

5 Reasons Why You Should Opt For Home Loans With Floating Interest Rates.

5 reasons why you should opt for home loans with floating interest rates.

Home Loans these days come with a choice of two different types of interest rates. The first and more traditional type is the fixed rate, wherein the interest you pay is calculated with a fixed rate through the tenure of your loan. The next is floating, wherein the rate keeps fluctuating depending on market performance and government policies.

However, many borrowers are confused as to which one they should choose. Both come with their own set of pros and cons, making it a difficult to go with one over the other. If you find yourself in this dilemma, the internet has brought you to the right place as this article will provide you 5 good reasons why you should opt for floating rates on your housing finance loan.

1. They make home loans more affordable.
Fixed rates could cause losses for the lender because even if the rates go up, you still pay the same interest rate. This is not the case with floating rates where the risk is borne by you; if the rates go up, you pay the higher rate. It is on account of this risk that you take that floating rates are generally lower than fixed rates. This difference can help you save a considerable amount of money over the tenure of your loan.

2. Experts suggest floating rates.
Most financial experts advise borrower to go for floating rates. This is because, not only are the current interest rates at an all-time low, but they are predicted to fall further in the coming years. What this means that you already low-interest rates could fall even lower.

3. There are no-prepayment charges.
This is another important advantage of home loans with the floating rate of interest. The fact that you can repay your loan as and when you are financially capable of doing so without any charges is a huge plus point. With fixed rates, even if you want to cut short the tenures and save on the total interest payable by making prepayments, you will have to face the charges that come with.

4. They are suitable for certain people.
If you are young, don’t mind the risk and have many working years ahead of you, home loans with a floating rate of interest are ideal. The lower cost makes them easier to handle as you are still finding your feet financially. You have many working years ahead of you that should be filled with appraisals, bonuses and other windfall gains that will help you cope with any rises in the rate easily.

5. You can switch back.

You can enjoy lowered rates till they last and the move back to fixed rates. You could also refinance your home loan to a new lender with lower fixed rates than your current lender. So not only to do you get savings, you also have the option to jump ship if they going get hard.

We hope you found this information useful and remember to consult a financial expert or speak to one of the lenders about the types of interest rates applicable on home loans before you make any concrete decisions.

Good luck and all the best!

Share:

Keywords: #homeloans,#housingloans,#homeloan

Comments

Other related blogs

TRIAL@>> http://supplementgems.com/phendora-garcinia-es/

By : Thermalufuz

TRIAL@>> http://supplementgems.com/phendora-garcinia-es-espana/ STORE@>> http://supplem..


How To Select Leading Hard Money Lender Services in Los Angeles

By : Hardmoneylenders.finance

  Most of us, at one time or another, have needed a loan. However, the restrictions that ban..


How GST Will Impact the Wallet of the Common Man

By : InsuranceIndia

What is GST? The objective of GST (Goods and Services Tax), implemented across India on 1st July 20..


LBC CAPITAL AS A HARD MONEY LENDER

By : Hardmoneylenders.finance

Have you tried obtaining a loan from a bank or any other financial institutions? If yes, then you un..