About the Floating vs Fixed Rate Calculator
What is the Floating vs Fixed Rate Calculator?
A fixed-rate loan keeps the same interest rate (and EMI) for its term; a floating-rate loan moves with a benchmark such as the repo rate. Fixed rates are usually higher at the start — you pay a premium for certainty.
Enter the loan amount, tenure, the fixed rate, today's floating rate and how much you expect the floating rate to change each year. The calculator resets the floating EMI every year on the remaining balance and compares total interest with the fixed loan.
How to use the Floating vs Fixed Rate Calculator
- Loan Amount (₹) (sample: 50,00,000)
- Tenure (years) (sample: 20)
- Fixed Rate (% per year) (sample: 9.25)
- Floating Rate Today (% per year) (sample: 8.5)
- Expected Floating Rate Change per Year (percentage points) — expected change each year in percentage points; negative if you expect rates to fall. (sample: 0.1)
- Press Compare Rates (results also refresh as you type). The result card shows the Cheaper Option, along with Fixed-rate EMI, Floating-rate EMI (year 1), Total interest – fixed and Total interest – floating.
Formula used
Floating rate in year k = Starting rate + Change × (k − 1)
- EMI = recalculated each year on the outstanding balance for the remaining months
Real rate changes are irregular; try a rising, flat and falling scenario to see the range.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Loan Amount (₹) | 50,00,000 |
| Tenure (years) | 20 |
| Fixed Rate (% per year) | 9.25 |
| Floating Rate Today (% per year) | 8.5 |
| Expected Floating Rate Change per Year (percentage points) | 0.1 |
| Result | Value |
|---|---|
| Cheaper Option | Floating rate, by ₹51,832 |
| Fixed-rate EMI | ₹45,793 |
| Floating-rate EMI (year 1) | ₹43,391 |
| Total interest – fixed | ₹59,90,402 |
| Total interest – floating | ₹59,38,570 |
| Floating rate in the final year | 10.4% |
Tips for using the Floating vs Fixed Rate Calculator
- Most home loans in India are floating and linked to an external benchmark such as the RBI repo rate.
- “Fixed” home loans often reset after 3–5 years; read the terms.
- Floating-rate loans taken by individuals for non-business purposes carry no prepayment penalty, which adds flexibility.