Interest Rates and Charges
A bank normally charges between 0.5% to 1% of the quantum of loan as one time service charges for sanctioning a loan. Home loans are sanctioned under two categories of interest rates namely floating rates and fixed rates. The applicant is allowed to make a choice at the time of application to choose between one of the above categories.

Floating Rate
Floating rate of interest, as the term states, depends on the prevailing market conditions and varies over time to time. The current rates prevailing in India range from 11% per annum to 12% per annum at present depending on the repayment period with less than 5 years attracting a lower rate and over 10 years attracting the higher rate.

Fixed Rate
Again, as the term states, the rate of interest remains fixed over a certain period depending on the bank/institution. The current rates prevalent in India range from 13% per annum to 14% per annum depending on the repayment period.

Loan Sanction
The loan sanction amount depends on your repayment capacity - based on your total current income and your future repayment capacity. Your spouse's gross income can be added to enhance the loan amount eligibility. The maximum loan that can be sanctioned varies with each bank/institution and generally ranges from Rs.2 lakhs to Rs.2 crore upto a maximum of 85% of the value of the property.

Repayment
Usually loan tenures range from 2 years to 25 years and does not extend beyond the age of retirement or when you turn 65 years of age - whichever comes first. The EMI - Equated Monthly Installment is the amount of money you repay every month until the end of the loan tenure - which comprises both principal component and an interest component.