Your home loan rate type affects your EMI for 15-20 years. Choose wisely.
The Reality of 'Fixed' Rate in India
Most Indian 'fixed rate' home loans are fixed for only 2-3 years, then convert to floating. True long-term fixed rates are rare and expensive (1.5-2% premium). See our [Fixed vs Floating comparison](/compare/home-loan-fixed-vs-floating).
How Floating Rates Work
Post-2019, all bank home loans are linked to external benchmarks (repo rate). SBI uses EBLR (External Benchmark Lending Rate) = Repo rate + spread. When RBI cuts repo rate, your EMI falls. When it rises, EMI increases.
Historical Rate Movement
Repo rate range (2015-2025): 4.0% to 6.5%. Home loan rates: 6.7% to 9.5%. Rate cycles average 3-5 years. Over a 20-year loan, you'll see multiple cycles — averaging out the volatility.
Practical Strategy
1. Start with floating rate (lower cost). 2. When rates rise, increase EMI to maintain tenure. 3. When rates fall, keep EMI same to reduce tenure. 4. Prepay whenever possible. Use our [Mortgage Calculator](/calculators/mortgage-calculator) to model scenarios.
Impact Analysis
₹50L loan, 20 years: At 8.5% = ₹43,391 EMI. Rate rises to 9.5% = ₹46,607 EMI (₹3,216 more). Rate falls to 7.5% = ₹40,280 EMI (₹3,111 less). Can you handle the swing? If yes, floating is better.