Housing Loan Interest Rates in Sri Lanka (2025 Prediction)

The Era of 20% rates is over.

After the volatility of 2022-2023, interest rates have normalized. For 2025, the market is stabilizing around the single-digit to low-double-digit range.

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1. Current Market Rates (Estimated 2025)

• Best Rates (Professionals): 10.5% - 12.0%
• Standard Rates: 12.0% - 14.0%
• Non-Bank Finance Companies: 16% - 18% (Easier approval, higher cost).

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2. Fixed vs Floating Rates

Fixed Rate

• How it works: Rate stays same (e.g., 12%) for a set period (3 or 5 years).
• Pros: Protection if market rates skyrocket again. Predictable budget.
• Cons: If market rates drop to 9%, you are stuck paying 12%.

Floating Rate (AWPLR + Margin)

• How it works: Linked to the Average Weighted Prime Lending Rate. Changes every 6 or 12 months.
• Pros: If economy improves, your rate drops.
• Cons: Risk. If inflation hits, your installment could double.

Recommendation for 2025: With the economy stabilizing, a Floating Rate might offer long-term savings if rates trend down. Conservative buyers should lock a Fixed Rate for 5 years.

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3. Comparison of Top Banks

Bank	Rate Type	Best For
BOC / Peoples	Low Rates	Govt Servants / Stability
Commercial / HNB	Competitive	Private Sector / Speed
NSB	Stable	Long tenure (up to 25 yrs)

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