1. When a customer took a home loan with floating rate, he must have had assumed that the rate of interest will keep varying as and when the fall in rate of interest takes place.
2. However a floating rate customer is always at loss due to banking policies due to the fact that when cost of funds inch up by almost 0.25%, it leads to bankers increasing the home loan rates by 0.5% to protect their margins. On the contrary the cost of funds have to fall by 0.5% to reduce the home loan rates by atleast 0.25%.
3. As a result of above analogy a floating rate customer is more susceptible to rate hike than the the fall in rate of interest.
Sunday 21 October, 2007
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This blog is a personal blog written and edited by me. For questions about this blog, please contact me.
This blog accepts forms of cash advertising, sponsorship, paid insertions or other forms of compensation.
This blog abides by word of mouth marketing standards. We believe in honesty of relationship, opinion and identity. The compensation received may influence the advertising content, topics or posts made in this blog. The owner(s) of this blog is compensated to provide opinion on products, services, websites and various other topics. Even though the owner(s) of this blog receives compensation for our posts or advertisements, we always give our honest opinions, findings, beliefs, or experiences on those topics or products. Every effort is made to make the sponsored post identifiable but at times due to advertisers restrictions the same may not be feasible all the time.The views and opinions expressed on this blog are purely the bloggers' own. Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer, provider or party in question.
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