say around 8 to 8. fixed interest rate in the initial 2 years.Teaser Loans have been designed to attract a home loan borrower in seeking a new loan. From 3rd year onwards. which would be subject to the then prevailing market rates.5 percent. . the rates revert to a higher fixed or floating interest rate. These loans have a relatively low.

Serves as an advantage to borrowers. The major concern of the RBI is the EMI affordability once the rates are revised. Many banks do not follow stringent and accurate evaluation of the borrowers financial and repayment capacity. Borrowers are seldom made to understand the difference in the initial years EMI versus the EMI for the rest of the loan tenure.Benefits & Concerns Home loans affordable for new borrowers. . especially if there is likelihood for the rates to move up shortly.