Floating vs fixed interest rates
A floating rate moves with a benchmark. A fixed rate stays put for a stated period, which may be the whole tenure or only the first few years. Floating rates are usually lower to start and expose you to rate cycles. Fixed rates cost more for the certainty.
What it means
A floating rate moves with a benchmark. A fixed rate stays put for a stated period, which may be the whole tenure or only the first few years.
Why it matters to a household
Floating rates are usually lower to start and expose you to rate cycles. Fixed rates cost more for the certainty.
Where it trips people up
Not reading how long "fixed" lasts. Many Indian fixed-rate home loans are fixed for two or three years and float afterwards.
In an Indian household
Floating-rate loans to individuals carry no prepayment penalty in India. Fixed-rate loans can, which affects the value of the certainty you are buying.
Where FamTally comes in
FamTally is a free AI-driven money manager built for Indian families. It holds your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and lets you ask an assistant questions about your own numbers rather than looking up general advice. Everything on this page is the kind of thing it works out for you automatically.
Stop doing this in a spreadsheet
FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.
Start freeQuestions people ask
Floating vs fixed interest rates
A floating rate moves with a benchmark. A fixed rate stays put for a stated period, which may be the whole tenure or only the first few years.
Why does it matter?
Floating rates are usually lower to start and expose you to rate cycles. Fixed rates cost more for the certainty.
What do people usually get wrong?
Not reading how long "fixed" lasts. Many Indian fixed-rate home loans are fixed for two or three years and float afterwards.
Is there anything India-specific?
Floating-rate loans to individuals carry no prepayment penalty in India. Fixed-rate loans can, which affects the value of the certainty you are buying.