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Fixed vs Floating Interest Rates: What Flat Buyers in Trivandrum Should Know
Posted onDec 22, 2025
It is the dream of most people to have their own house; big or small, plain or luxurious, are considerations that come later. For smaller families, professionals, techies, and NRIs, apartments are often the most practical choice. This preference is clearly reflected in the real estate market trends in Trivandrum, where flats developed by reputed builders in Kerala are witnessing higher demand compared to other types of residences.
It is important that you set a budget and stick to it; you should choose an apartment that fits in your budget, as they are available in every price range.
Today, housing loans are easily available from several banks and financial institutions. There are hundreds of housing loan products available, and it is important to study them well and weigh the pros and cons of all before you actually choose.
The rate of interest, loan tenure, and foreclosure charges are just a few of the many aspects of a home loan you must be familiar with when planning to buy a flat in Trivandrum. Today, we will discuss the merits and demerits of the two types of interest rates at which home loans are available: fixed interest rates and floating interest rates.
Fixed Interest Rate
Here, the ROI stays the same till your last instalment is paid. Your EMI amount status remains the same, even if market interest rates rise or fall.
Advantages
1. Stable and Predictable
Fixed rates are ideal for buyers seeking steady monthly expenses. Knowing the exact monthly EMI helps them budget properly. This is the best for salaried professionals, young families, and NRIs with families in India.
2. Market Fluctuation-Resistant
Interest rates can fluctuate greatly in volatile economies, but here your loan EMIs remain unchanged, helping you avoid a sudden increase in income.
3. Long-Term Benefits
Purchasing a flat for your own use and moving to live there will help you avoid an unexpected surge in expenses. You can also enjoy the benefit of capital appreciation.
Floating Interest Rate
Here, the interest rate changes according to the economic conditions. When the RBI increases the repo or benchmark rate, your EMI may increase; and decrease if the RBI lowers the repo rate.
Advantages
1. Lower Initial Rate
Floating interest rates are usually cheaper than fixed rates at approval, which means smaller and more affordable EMIs.
2. Benefit When Rates Decrease
When government policies or economic conditions change, interest rates can drop. In fact, the RBI lowered the repo rate slightly just a few days ago. At such times, your EMI automatically decreases, allowing you to close the loan quicker or save a great deal over time.
3. Ideal for Shorter Tenures
Many NRIs and well-paid professionals choose short-term loans so that they can pay off their debts quickly. Floating rates can help reduce the cost of your loan, as you can gain from market-linked rates and pricing.
Ideal Option for Trivandrum Home Buyers
Both options offer their own benefits, and the best choice depends wholly on your financial health, goals, and future plans.
Trivandrum, being the capital city and the centre of government offices and administration, has always attracted settlers and officials on transfer. But today it is also emerging as a major IT hub thanks to the IT township and many IT parks. Demand for premium housing is on the rise, with builders creating lifestyle communities in prime localities.
The choice of interest type should be carefully considered:
- When Markets are Stable
If the interest rates have stagnated for a long period and if there’s a possibility of an increase in the near future, it makes sense to choose a fixed rate.
2. During Market Volatility
If there are indications that the rates may fluctuate or decrease, a floating rate may be more advantageous in the long term.
3. Individual Risk Appetite
Low-risk takers who want stability should ideally go for a fixed rate. Those who are willing to risk a potential spike with a possibility of savings with lower rates in the future can choose floating rates.
Which Rates Should Investors Choose
Whether an NRI or a local professional, it is crucial to follow Real Estate Investing in Trivandrum: 10 Best Strategies For Beginners and Pros.
If you are an investor who wants a steady rental income, you can choose floating rates and keep initial costs low. If you’re a long-term investor purchasing premium flats for your own use, choosing fixed rates can offer stability.
Conclusion
Knowing the difference between fixed and floating interest rates for home loans can help you greatly in making the right choice of home loans. As we have seen, both have their advantages and drawbacks, and the decision depends on your own financial status and goals.
Varma Homes brings you well-designed, RERA-certified apartments in the best neighbourhoods in Trivandrum. Check out our premium 2 and 3 BHK flats now.