Everything You Should Know About Fixed Rate of Interest on Home Loan

Updated on October 6, 2025 , 2570 views

Dharmesh is a 25-year-old man with a stable job. He moved to Mumbai in order to look for a job and settle down with his family. After completing two years at his workplace, Dharmesh decided to buy a house so that he can ask his parents to move in with him. With excitement, he started scrolling through various apartment listings online and came across a beautiful and cosy home in Mumbai. He knew then and there- this was the house he was looking for.

Soon, he set up an appointment with an agent who took him for a tour through the house. Dharmesh was in love with light-coloured walls, daintily painted inner spaces and the wide and open kitchen space. He knew his family would fall in love with the home.

However, Dharmesh did not have enough cash to buy the house and decided to apply for a Home Loan. While researching for the best home loans online, he came across something he didn’t know much about- The fixed rate of interest.

What is Fixed Rate of Interest?

Fixed-rate of interest is exactly as it sounds- it’s a fixed rate. This means that the rate of interest will remain unchanged on the loan you have opted for. This rate of interest remains fixed for the tenure of the loan or at least a part of the tenure. The details will be made clear during the time of the loan application.

In case you are buying a home, the loan repayment tenure is usually 30 years. The rate of interest will remain constant throughout. However, this is only advantageous when the Market conditions are trending downward.

Fixed-rate of interest is an attractive option for borrowers who don’t want to take the risk of changing interest rates. Borrowers usually take up this option when the rate of interest is low.

For instance, if Dharmesh opts for a home loan with a fixed rate of interest when the interest rate in the market is pointing downward, he will be making a profitable investment. The rate of interest will remain constant for him for the loan repayment tenure he chooses. This will not change even if there is Inflation.

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Benefits of Fixed Rate of Interest

1. Certainty

The major advantage of a fixed rate of interest is the Factor of certainty. The rate of interest remains unchanged for the loan period. This will help you plan your self financially and maintain the standard of living.

2. Low-Interest Rates

Borrowing loan during times of low-interest rates can be extremely beneficial since the rate will remain constant throughout your loan period though it may undergo changes in the period. You could save money with the loan repayment and the interest rate.

3. Repayment Tenure

Fixed Interest Rate is beneficial even with longer loan repayment tenures. Even if changes occur in the real-time rate of interest, you will not have to worry for the fixed loan period. The rate of interest for you will remain unchanged no matter what happens.

4. Maintaining Budget

With fixed interest rates you can manage your monthly EMI and other financial budget very well.

5. Financial Security

Since fixed-rate of interest offers financial security. This means that you don’t have to worry about losing more money even if market rates rise.

Fixed Interest Rate Home Loans in India 2025

Two major banks in India offer home loans with fixed interest rates. They are HDFC Bank and Axis Bank.

Note: HDFC bank offers an interest rate based on the quantum of the loan. This interest rate is subject to a fixed period of two years. The interest rate will change thereafter.

Bank	Rate of Interest
HDFC Bank	7.40% p.a- 8.20% p.a
Axis Bank	12% p.a.

Save for a Home the SIP Way!

If you don’t wish to opt for a home loan, you can still save money and buy the house of your dreams with the Systematic Investment plan (SIP). SIP gives you the freedom to save money regularly with ease. You can plan your budget and savings with SIP and also expect great returns. Save monthly and buy your dream home with SIP today!

Fund	NAV	Net Assets (Cr)	Min SIP Investment	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2024 (%)
DSP World Gold Fund Growth	₹45.6985 ↓ -0.48	₹1,421	500	49.2	87.6	107.7	49.1	17.9	15.9
Aditya Birla Sun Life Gold Fund Growth	₹35.7393 ↑ 0.77	₹725	100	26	38.8	60.2	31.5	18.1	18.7
SBI Gold Fund Growth	₹35.8091 ↑ 0.72	₹5,221	500	25.6	37.9	59.7	31.5	18	19.6
ICICI Prudential Regular Gold Savings Fund Growth	₹37.9633 ↑ 0.76	₹2,603	100	26	38.5	59.8	31.4	18	19.5
HDFC Gold Fund Growth	₹36.5994 ↑ 0.69	₹4,915	300	25.7	37.9	59.5	31.3	17.9	18.9
Axis Gold Fund Growth	₹35.691 ↑ 0.70	₹1,272	1,000	25.7	37.7	59.3	31.3	18.1	19.2
Nippon India Gold Savings Fund Growth	₹46.9059 ↑ 0.93	₹3,439	100	25.7	37.7	59.7	31.3	17.8	19
Kotak Gold Fund Growth	₹46.9257 ↑ 0.89	₹3,506	1,000	25.2	37.5	58.9	31	17.7	18.9
SBI PSU Fund Growth	₹32.4307 ↓ -0.26	₹5,179	500	-0.4	11.6	-0.4	30.9	32.7	23.5
Invesco India PSU Equity Fund Growth	₹63.91 ↓ -0.50	₹1,341	500	-3.3	15	-0.8	30.3	30.4	25.6
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 7 Oct 25

Research Highlights & Commentary of 10 Funds showcased

Commentary	DSP World Gold Fund	Aditya Birla Sun Life Gold Fund	SBI Gold Fund	ICICI Prudential Regular Gold Savings Fund	HDFC Gold Fund	Axis Gold Fund	Nippon India Gold Savings Fund	Kotak Gold Fund	SBI PSU Fund	Invesco India PSU Equity Fund
Point 1	Lower mid AUM (₹1,421 Cr).	Bottom quartile AUM (₹725 Cr).	Highest AUM (₹5,221 Cr).	Lower mid AUM (₹2,603 Cr).	Upper mid AUM (₹4,915 Cr).	Bottom quartile AUM (₹1,272 Cr).	Upper mid AUM (₹3,439 Cr).	Upper mid AUM (₹3,506 Cr).	Top quartile AUM (₹5,179 Cr).	Bottom quartile AUM (₹1,341 Cr).
Point 2	Oldest track record among peers (18 yrs).	Established history (13+ yrs).	Established history (14+ yrs).	Established history (14+ yrs).	Established history (13+ yrs).	Established history (13+ yrs).	Established history (14+ yrs).	Established history (14+ yrs).	Established history (15+ yrs).	Established history (15+ yrs).
Point 3	Top rated.	Rating: 3★ (top quartile).	Rating: 2★ (upper mid).	Rating: 1★ (lower mid).	Rating: 1★ (bottom quartile).	Rating: 1★ (bottom quartile).	Rating: 2★ (upper mid).	Rating: 1★ (bottom quartile).	Rating: 2★ (lower mid).	Rating: 3★ (upper mid).
Point 4	Risk profile: High.	Risk profile: Moderately High.	Risk profile: Moderately High.	Risk profile: Moderately High.	Risk profile: Moderately High.	Risk profile: Moderately High.	Risk profile: Moderately High.	Risk profile: Moderately High.	Risk profile: High.	Risk profile: High.
Point 5	5Y return: 17.85% (bottom quartile).	5Y return: 18.06% (upper mid).	5Y return: 18.02% (upper mid).	5Y return: 17.95% (lower mid).	5Y return: 17.89% (lower mid).	5Y return: 18.05% (upper mid).	5Y return: 17.80% (bottom quartile).	5Y return: 17.72% (bottom quartile).	5Y return: 32.72% (top quartile).	5Y return: 30.35% (top quartile).
Point 6	3Y return: 49.09% (top quartile).	3Y return: 31.47% (top quartile).	3Y return: 31.47% (upper mid).	3Y return: 31.44% (upper mid).	3Y return: 31.34% (upper mid).	3Y return: 31.28% (lower mid).	3Y return: 31.26% (lower mid).	3Y return: 31.03% (bottom quartile).	3Y return: 30.91% (bottom quartile).	3Y return: 30.27% (bottom quartile).
Point 7	1Y return: 107.66% (top quartile).	1Y return: 60.19% (top quartile).	1Y return: 59.73% (upper mid).	1Y return: 59.82% (upper mid).	1Y return: 59.51% (lower mid).	1Y return: 59.32% (lower mid).	1Y return: 59.66% (upper mid).	1Y return: 58.86% (bottom quartile).	1Y return: -0.36% (bottom quartile).	1Y return: -0.82% (bottom quartile).
Point 8	Alpha: 3.15 (top quartile).	1M return: 13.14% (upper mid).	1M return: 14.54% (upper mid).	1M return: 14.63% (top quartile).	1M return: 12.88% (lower mid).	1M return: 13.00% (upper mid).	1M return: 12.96% (lower mid).	1M return: 12.32% (bottom quartile).	Alpha: -0.35 (bottom quartile).	Alpha: 5.81 (top quartile).
Point 9	Sharpe: 1.80 (bottom quartile).	Alpha: 0.00 (upper mid).	Alpha: 0.00 (upper mid).	Alpha: 0.00 (upper mid).	Alpha: 0.00 (lower mid).	Alpha: 0.00 (lower mid).	Alpha: 0.00 (bottom quartile).	Alpha: 0.00 (bottom quartile).	Sharpe: -0.81 (bottom quartile).	Sharpe: -0.58 (bottom quartile).
Point 10	Information ratio: -1.09 (bottom quartile).	Sharpe: 2.66 (top quartile).	Sharpe: 2.58 (upper mid).	Sharpe: 2.55 (upper mid).	Sharpe: 2.55 (lower mid).	Sharpe: 2.57 (upper mid).	Sharpe: 2.52 (lower mid).	Sharpe: 2.58 (top quartile).	Information ratio: -0.37 (bottom quartile).	Information ratio: -0.46 (bottom quartile).

DSP World Gold Fund

Lower mid AUM (₹1,421 Cr).
Oldest track record among peers (18 yrs).
Top rated.
Risk profile: High.
5Y return: 17.85% (bottom quartile).
3Y return: 49.09% (top quartile).
1Y return: 107.66% (top quartile).
Alpha: 3.15 (top quartile).
Sharpe: 1.80 (bottom quartile).
Information ratio: -1.09 (bottom quartile).

Aditya Birla Sun Life Gold Fund

Bottom quartile AUM (₹725 Cr).
Established history (13+ yrs).
Rating: 3★ (top quartile).
Risk profile: Moderately High.
5Y return: 18.06% (upper mid).
3Y return: 31.47% (top quartile).
1Y return: 60.19% (top quartile).
1M return: 13.14% (upper mid).
Alpha: 0.00 (upper mid).
Sharpe: 2.66 (top quartile).

SBI Gold Fund

Highest AUM (₹5,221 Cr).
Established history (14+ yrs).
Rating: 2★ (upper mid).
Risk profile: Moderately High.
5Y return: 18.02% (upper mid).
3Y return: 31.47% (upper mid).
1Y return: 59.73% (upper mid).
1M return: 14.54% (upper mid).
Alpha: 0.00 (upper mid).
Sharpe: 2.58 (upper mid).

ICICI Prudential Regular Gold Savings Fund

Lower mid AUM (₹2,603 Cr).
Established history (14+ yrs).
Rating: 1★ (lower mid).
Risk profile: Moderately High.
5Y return: 17.95% (lower mid).
3Y return: 31.44% (upper mid).
1Y return: 59.82% (upper mid).
1M return: 14.63% (top quartile).
Alpha: 0.00 (upper mid).
Sharpe: 2.55 (upper mid).

HDFC Gold Fund

Upper mid AUM (₹4,915 Cr).
Established history (13+ yrs).
Rating: 1★ (bottom quartile).
Risk profile: Moderately High.
5Y return: 17.89% (lower mid).
3Y return: 31.34% (upper mid).
1Y return: 59.51% (lower mid).
1M return: 12.88% (lower mid).
Alpha: 0.00 (lower mid).
Sharpe: 2.55 (lower mid).

Axis Gold Fund

Bottom quartile AUM (₹1,272 Cr).
Established history (13+ yrs).
Rating: 1★ (bottom quartile).
Risk profile: Moderately High.
5Y return: 18.05% (upper mid).
3Y return: 31.28% (lower mid).
1Y return: 59.32% (lower mid).
1M return: 13.00% (upper mid).
Alpha: 0.00 (lower mid).
Sharpe: 2.57 (upper mid).

Nippon India Gold Savings Fund

Upper mid AUM (₹3,439 Cr).
Established history (14+ yrs).
Rating: 2★ (upper mid).
Risk profile: Moderately High.
5Y return: 17.80% (bottom quartile).
3Y return: 31.26% (lower mid).
1Y return: 59.66% (upper mid).
1M return: 12.96% (lower mid).
Alpha: 0.00 (bottom quartile).
Sharpe: 2.52 (lower mid).

Kotak Gold Fund

Upper mid AUM (₹3,506 Cr).
Established history (14+ yrs).
Rating: 1★ (bottom quartile).
Risk profile: Moderately High.
5Y return: 17.72% (bottom quartile).
3Y return: 31.03% (bottom quartile).
1Y return: 58.86% (bottom quartile).
1M return: 12.32% (bottom quartile).
Alpha: 0.00 (bottom quartile).
Sharpe: 2.58 (top quartile).

SBI PSU Fund

Top quartile AUM (₹5,179 Cr).
Established history (15+ yrs).
Rating: 2★ (lower mid).
Risk profile: High.
5Y return: 32.72% (top quartile).
3Y return: 30.91% (bottom quartile).
1Y return: -0.36% (bottom quartile).
Alpha: -0.35 (bottom quartile).
Sharpe: -0.81 (bottom quartile).
Information ratio: -0.37 (bottom quartile).

Invesco India PSU Equity Fund

Bottom quartile AUM (₹1,341 Cr).
Established history (15+ yrs).
Rating: 3★ (upper mid).
Risk profile: High.
5Y return: 30.35% (top quartile).
3Y return: 30.27% (bottom quartile).
1Y return: -0.82% (bottom quartile).
Alpha: 5.81 (top quartile).
Sharpe: -0.58 (bottom quartile).
Information ratio: -0.46 (bottom quartile).

Funds mentioned are considering best CAGR returns for over 3 years and fund having atleast have market history (Fund age) of 3 year and have minimum 500 Crore of asset under management.

Conclusion

When applying for a loan, make sure to read all the terms and conditions carefully.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.