How to reduce impact of interest rate hikes on home loans?

You can reduce impact of interest rate hikes on home loans by ensuring the following: Make Higher Down Payment – When buying a home if you choose to pay higher down payment then automatically your EMI burden reduces. It shows the lender you are serious about paying the loan so there is a possibility of lower interest rates as well. Prepayment – This is basically an option where one pays additional amounts towards the home loan over & above their EMI burden. This directly get deducted in the principal component and as a result the EMI reduces as well. Choose Floating Interest Rate – If you choose floating instead of fixed interest rate, then when interest rate falls you are direct beneficiary with reduction in EMI as per new fallen interest rate. In current scenario this option will work as RBI in second half of this year will start reducing interest rates. Choose Right Lender – You need to choose the right lender who offers the lowest interest rate, has lower processing fees, and has flexible repayment options. Maintain discipline – You need to maintain discipline in your savings & make timely EMI payments which in turns improves your credit score.