A Home Loan Calculator For Fixed And Floating Interest Rates

There are three types of home loan interest rates in India: fixed, floating and hybrid. Let’s explore the usage and applicability of home loan calculators in India for the fixed and floating interest rates. When you are talking about EMI calculators, you must understand they are far too advanced than the basic calculators or excel sheet home loan calculations.

Home loan calculations for fixed interest rates:

Most borrowers will need to calculate more than the monthly home loan EMIs. Unless you have a written guarantee for no variation in your home loan rates, your fixed interest rates can elevate or dip after an interval of 3 to 5 years.Then, you can use the home loan calculator to identify the EMIs that you might need to pay if the interest rate increases within the possible range. You will need to take this factor into consideration as the home loan is a financial agreement for 20 to 30 years. So, any change in the interest rates will be relevant. Though, most borrowers will have access to additional income, there will be additional expenses too. So, it is a smart strategy to opt for a home loan calculator to understand the likely variations and their impact on the EMIs.

Home loan calculations for floating interest rates

A lot of people opting for floating interest rates are really excited about the relatively lower interest rates. They are willing to opt for a shorter home loan tenure because the home loan calculators reveal that you can get away with lower interest by taking this route. But, the potential fluctuations affect the floating rate borrowers the most. Since these changes may come as a shock, having access to liquid funds will be vital to borrowers.

The comparative analysis

The fixed rate home loan borrowers need to worry about a higher growth in the interest rates, while floating rate home loan borrowers need to focus on frequent fluctuations. Since, any variation will have a direct impact on the EMIs; it is obvious that you will need to be prepared at all times. You, however, can anticipate these variations with the right use of home loan calculators in India. You can use the amortization table in the home loan calculators to identify the amount that you will owe over a period of 3 to 5 years for fixed home loan rates. You may need more realistic insights into the likely variations to calculate the range of interest rates that you can afford to pay. If you understand the basic range, you can select the right housing loan from the start and create a SIP or RD for any sudden hike in your EMIs.