As an interested reader, when I see "Very few banks offer actual true-blue fixed interest rates.", I would definitely expect you to give the names of those very few rare species of banks. If no one gives such fixed-rates, why don't you say so? If you have info, plz do share it. I did not quite get this comment on "politicians can ill afford to ignore and hence a dramatic increase in rates in a short time is very unlikely." Do you mean to say PC or SG will call up our RBI head and say..."hey stop it...I don't care what you are thinking?"
RE:Can we have some more clarity?
by Venkata kommu on Feb 19, 2007 09:14 PM
ICICI and HDFC still offer fixed rate loans which remain fixed till the entire tenure.
RE:Can we have some more clarity?
by amit Sharma on Feb 20, 2007 09:41 AM
what the hell r u taking about? why SG or PC can't call up RBI to curb the rates. It is there resonsibility and the matter is directly connected to lives of millions of people who have taken home loans which they will repay for rest of their lives.
Unlike most of the developed countries..wherein financial institutions do offer transparent floating rates, in India, we hardly have any bank which offers such kind of transparency.
The calculation of the benchmark PLR (based on which the home loan rates are derived with a mark-up)is arrived is not made public and nor is there any regulatory insistence to do so. Ideally the interest rates should move upwards and downwards with hardly some lag (say a month after the revision of benchmark PLRs)...but what happens in reality is banks increase the interest rates instantly and does not reduce them in case their borrowing costs go down..
We have many instances in India where banks have started giving new loans by creating a new benchmarks...so what was happening some time back with interest rates falling..the existing customers were not being passed the benefit of lowering interest rates, but banks use to enroll new customers offering lower interest rates with new benchmarks... and those existing people had to get out those locked in loans by paying penalties...what a crap....
My advice to people some time back was when interest rates were (6.75 - 7.00 fixed)was to lock in at 6.75 - 7 (for inflation will hover around 5-6% in a booming economy)..now they have made a killing...but of course things do change dramatically...
RE:A myth called transparent 'Floating Rate'
by rishi jain on Feb 22, 2007 11:26 PM
Dear Rakesh, I am taking House loan of 10L for 15 Years with an emi of about 13K PM. ( considering floating@ 10%) Do u suggest floating or fixed and why?
