Type of the interest rates in the Home Loan


Want to take a home loan? Different banks provide different interest rates on home loans. Today, you can quickly check home loan interest rates on the internet. In contrast to the different banks, people want to find a bank that provides a home loan at lower interest rates.

The rate of interest applicable by the bank on the home loan is an essential consideration for the borrower. In this article, we cover all the important facts related to home loan interest rates. Read the complete article and determine whether the home loan with the specific interest rates meets your requirements or not.

A way to calculate the effective interest rates 

The home loan markup rates and the base rate helps to calculate the relevant home loan interest rate by all banks today. On the home loan, you have to pay a combination of the two. Let us make look at the following points to get a clear understanding.

Base rate

The base rate is considered the bank’s standard lending rate that is applicable to all its retail loans. The base rate frequently fluctuates due to the existence of various inputs.

Markup rate 

The effective interest rates on the home loan are calculated easily by adding a small percentage to the base rate, which differs from one type to another.

Type of the interest rates applicable on Home Loan

There are two types of interest rates applicable on the home loan. Check the following two home loan interest rates.

1. Fixed interest rates 

The Fixed interest rates remain constant in the home loan term. As the lowest mortgage interest rate is fixed by the bank, it means that there will be no changes occuring in the interest costs.

Based on the offers, you can also switch the fixed interest scheme to the floating interest rate scheme once the set period is passed on your home loan.

The best thing about the fixed interest rate scheme is that you know the exact amount of interest rate that you have to pay on the home loan.

2. Floating interest rates 

The interest rate on the home loan is determined by the current highest lending rate of banks. This rate depends on the latest home loan interest rate of the bank, which is influenced by many factors.

The benefit of choosing the floating interest rate is that you are billed on the current rate. In this way, you can save money if the rates of interest payments drop. It is also easy to determine the floating interest rates.


In this article, you will get information on home loan interest rates. Here we tell you about the base rate and the markup rates also, which helps you to calculate the effective interest rates on the home loan.

You can also learn about the type of interest rate on home loans in this article. Hope you will get a clear understanding of the all-important facts.

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