Fixed, floating or variable rate loan? See what suits you most

I want to take a home loan for five years. Which option is best — fixed rate, floating rate or variable rate?
— Raju Behwal
There cannot be a definite yes or no to your question. You need to go through some websites that provide comparative data on fixed and floating rates. Please also study the charges being levied especially by those whose rates are little lower. Do remember that the fixed rate is not fixed during the entire tenure of the loan. The term loan agreement contains a re-set clause enabling the lender to change the rate at a specified timeframe Since you need the loan for five years only just go through websites to see which bank / housing finance company is offering resetting after every five years so that you enjoy fixed rate for the entire tenure. You must have seen that rates have started rising. In view of this, take a call which suits you the most.

The writer is chief counsellor, Abhay credit counselling, a trust sponsored by Bank of India. He will answer credit card and loan queries and can be contacted at dnadebtqueries@gmail.com