Fixed rate
A loan interest rate that stays the same for the period agreed, whatever happens to market rates.
A fixed rate is a loan interest rate that stays the same for the period you agreed. Your EMI is predictable, which makes budgeting easy. The trade-off: if market rates fall, your rate doesn’t. Many fixed loans are fixed only for a few years, so check the terms. Compare it with a floating rate in fixed vs floating interest rates.
Questions people ask
What is a fixed interest rate?
A fixed rate is a loan interest rate that doesn't change for the period agreed in your loan, so your EMI stays the same. If market rates rise, you're protected; if they fall, you don't benefit.
Is a fixed rate home loan fixed for the whole tenure?
Often not. Many 'fixed' home loans are fixed only for the first few years and then switch to a floating rate. Read your sanction letter for exactly how long the rate is fixed and what happens after.
Can I prepay a fixed rate loan without a charge?
Not always. RBI rules bar prepayment charges for individuals on floating rate loans from 1 January 2026, but a fixed rate loan may still carry a charge. Check your sanction letter and Key Facts Statement.
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