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Are fixed-floating rates a sound option for retail home loan borrowers?

Two leading industry experts debate the merits and demerits of the new fixed-floating rate product that the SBI chairman proposed recently

Sanjay Kumar Singh  |  New Delhi 

State Bank of India (SBI) chairman Rajnish Kumar recently spoke about seeking a clarification from the Reserve Bank of India (RBI) on launching long-term home loan products that would initially have a fixed rate and would then move to a floating rate. His proposal has revived memories of a home-loan product SBI had pioneered in 2009, which was popularly known as “teaser loan”.

This product offered customers a home loan at a lower rate of interest initially. Once that period got over, the customer was moved to the market-linked floating rate existing then. The idea was that ...

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First Published: Fri, September 27 2019. 14:15 IST
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