Advantages or Disadvantages of fixed or floating home loan interest rate

With the banking system getting digitalized, the popularity of home loan has increased. Along with buying a new house, it also helps in the renovation and extension of a portion of the house. While availing the home loan, you have the option to chose from two home loan interest rate: 



1. Under the fixed home loan, the rate of interest does not change irrespective of market changes.
2. Under the floating home loan, the rate of interest fluctuates from time to time. 

Both interest rate types are different in their form and nature. Following are the advantages of fixed home loan interest and floating home loan interest:

a) under a fixed home loan rate, there is no fluctuations in the rate of interest along with immunity from the changes in the external market. It makes budgeting for the dues easier.
b) the floating home loan rate is comparatively lower than fixed rates, so a rise in rate to a certain extent will not have any effect.

Disadvantages of fixed and floating home loan rates are: 

 a) In the scenario when the market rate is significantly lower than fixed-rate, than it will cause inconvenience to the borrower.
b) In the case of the floating home loan rate, the monthly dues are fluctuating, which makes it difficult to evaluate the exact EMI and resulting in disrupting the monthly budget.

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