Fixed Vs. Floating Interest Rate: Home Loans In Killeen, TX 7. January 2016 Administrator Home Loans (0) Getting a home loan from a credit union in Killeen, TX is not a very tedious job as there is minimum paperwork involved. However, you need to choose whether you want to opt for a fixed or floating rate of interest. Both the options have their own advantages as well as disadvantages and it is up to you to decide which one is better.Fixed rate of interest home loansA fixed rate of interest implies repayment of loan in fixed equal installments during the loan term. In this case, the rate of interest remains constant and does not change with the market fluctuations. Advantages:No alterations in the rate of interest irrespective of market conditions.Perfect option for people who have fixed budgets.It is a secure alternative.Disadvantages:Loans are 1 to 2.5% higher than floating interest rate depending on the bank.If the interest rate decreases in the market, you will not get any advantage.In some instances the fixed rate home loan is fixed only for a few years and not the complete loan tenure.Floating rate of interest home loansIf you apply for a home loan with a floating rate of interest, it simply means that the interest rate will differ as per the market conditions. In this instance, the interest rates are associated with a base rate and a floating element. Therefore, if there is any alteration in the base rate, the interest rate also fluctuates.Advantages:Cheaper than fixed interest rate home loans.If the floating rate increases than fixed rate, it is temporary and not for entire loan period.Can prove to be beneficial if you want to save money.Disadvantages:Monthly installments are not constant.You can face difficulty in planning your budget.There has been a hike in floating interest rates in recent times.It can be concluded that fixed as well as floating interest rate home loans in Killeen have positive as well as negative aspects. Generally, borrowers opt for a floating rate of interest when applying for a home loan from a credit union. However, if you want more security and certainty, it is better to opt for a fixed rate home loan. If you are looking for affordable home loans in Killeen, TX, consider Greater Central Texas Federal Credit Union. For more information, call at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX 76542.