Fixed Rate Home Loan

Overview of Fixed Rate Home Loan

Over the years fixed rate home loan has been a very popular home loan option for the mortgage borrowers. The most important feature of the fixed rate home loan is that the interest rate remains same throughout the duration of the loan.

The fixed rate home loans are different from the adjustable rate home loans. In case of adjustable rate home loans the rates of interest keep changing in tandem with the fluctuations in the market.

Types of Fixed Rate Home Loans

The fixed rate home loans are normally available in two types. In one kind of fixed rate home loan, the rate of interest is fixed for a specific period. At the end of the specified period the interest rates are reviewed. In this period the interest rate may be adjusted according to the present rates.

The regular fixed rate home loans are available in two denominations – that of three years and five years. The difference between the two lies in the fact that the tenures of the review are different. The fixed rate home loans for five years are also more expensive compared to their three year counterparts.

There is another type of fixed rate home loan known as the 'pure' fixed rates. The special feature of this loan is that the interest rate remains the same throughout the duration of the loan. The pure fixed rates are different from the conventional fixed rate home loans. They are more expensive as well.

Fixed Rate Home Loans in Various Countries

The fixed rate home loans are available in various countries all over the world. However the conditions of these loans differ. In Canada the fixed rate home loans are not entirely fixed and the rate is fixed only up to a certain point of time. In the United States as well as India the fixed rate home loans are becoming increasingly popular over the passage of time.