Basics3 min read · Updated 17 October 2026
Fixed vs floating home loan rate: which is better in India today?
How fixed and floating home loan rates differ, what a rate rise does to your EMI, when fixed can make sense and the prepayment rule that favours floating.
The difference in one table
| Floating | Fixed | |
|---|---|---|
| Rate | Moves with a benchmark such as the repo rate | Stays the same for the fixed period |
| Starting rate | Usually lower | Usually higher |
| EMI | Can rise or fall | Predictable |
| Prepayment charge | None for individuals (non-business) | Per the lender's policy |
| If rates fall | You benefit at your next reset | You do not, unless you switch |
What a rate rise does
On ₹50 lakh for 20 years, the EMI at 8.5% is about ₹43,391. If a floating rate rises by 1 point to 9.5%, the EMI becomes about ₹46,607, an extra ₹3,215 a month. If a fixed rate was 9.5% from the start, the EMI would have been ₹46,607 all along. Floating wins if rates stay flat or fall, and fixed wins only if rates rise by more than the premium you paid. See What if rates rise? and the October 2026 repo rate hike.
What lenders list for fixed options
A few lenders in our table show fixed or fixed-period options.
- Bank of Baroda: Fixed option 8.90–9.95%
- Punjab National Bank: Fixed option up to 11.35%
- Bank of Maharashtra: Fixed option 11.60–12.90%
These are listed figures, not offers. Ask for the fixed period, the rate after it ends and any fee to switch.
The prepayment rule
RBI bars prepayment charges on floating-rate home loans to individuals for non-business purposes sanctioned or renewed on or after 1 January 2026. For fixed-rate loans, charges are as per the lender's policy and must be in your Key Fact Statement. See the rule explained.
Which to choose
- Floating if you can handle some EMI change, want to prepay or switch, and want to benefit when rates fall.
- Fixed if you want a certain EMI for the fixed period, can afford the higher rate, and understand what happens when it ends.
- Either way, check your income against a rate rise first.
Common questions
Is a fixed or floating home loan better?
Floating is usually cheaper at the start and has no prepayment charge for individuals. Fixed gives a stable EMI at a higher rate. Choose on how much EMI change you can handle.
Can I switch from fixed to floating?
Most lenders allow it, usually for a fee. Ask for the fee and the new rate before you apply.
Why is a fixed rate higher?
The lender carries the risk that rates rise, so it charges a premium to cover that.