Sunday, January 2, 2011

HOME LOAN INTEREST RATES

GUIDE TO HOME LOAN INTEREST RATES

There are 2 kinds of lenders . Banks (sbi ,axis ,icici etc ) and housing finance companies between them many kinds of home loan rates available some are described below :-

1)fixed home loan rates - in true fixed rate home lones the rate of interest is very high (13.50% +) and is offered by limited number of companys .

2)resettable fixed rates - here the interest rate is fixed for a period of 2-5 years and then reset for a further period of 2-5 years and so on . These rates are more reasonale than the true fixed rates dealt with above . You just need to be clear about the mature of fixed rates contract you are getting into .

3)floating home loan rates - the effective rate is linked to the banks current interest rate . The base rate would be declared by banks at least once every quarter . Bank can change or fix their rates but it is not allowed to change the methdology after selecting one methodology .

4)teaser rate scheme - under such scheme the initial rate is fixed for a certain period and then the applicable floating rate after 1-5 years .this is a good option in current .

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