Interest rates and EMIs are two crucial factors that a borrower should consider while availing a housing loan. Interest rates can significantly affect the total cost associated with credit, while an EMI amount affects the financial burden on a borrower.

Importance of interest rates
Home loan rates of interest are of two types: fixed and floating. Home loan fixed interest rates remain constant throughout the tenor as it does not depend on market conditions. On the other hand, floating interest rates vary according to the economic scenario. Borrowers should carefully decide the type of interest rate they want to avail as it can significantly reduce the cost of their credit.
Furthermore, interest rates offered by various financial institutions vary from time to time. Hence, the borrowers should compare the offered rates before they avail such credits.

Importance of EMIs
A borrower should carefully calculate the EMI amount they are comfortable to pay before availing a home loan. They are required to take into account various factors, including their monthly cash outflows, to determine their monthly instalments.
Applicants need to ensure that their total monthly obligations, including the new loan EMI, do not exceed 50% of their regular income. Keeping the total liabilities low ensures they can repay their debt effectively. Borrowers can also opt for part pre-payment and foreclosure facilities to reduce their home loan EMIs.
Home loan rates determine the EMIs. With an increase of interest rates, the EMI amount also rises. Borrowers should also consider the tenor to make sure the monthly instalments are affordable.