Should you opt for a 1 year fixed interest rate home loan or a 3 yr fixed interest rate home loan.

In a bid to woo customers, many lending institutions have brought out attractive home loan schemes, for example, SBI Easy Loan with a fixed interest rate of 8 per cent for the first year. But how can one decide whether these schemes are really beneficial? Well, the actual benefits in a home loan are known by how the interest will be calculated on it. Interest on a home loan is calculated in various manners, one of them is the one used for loans having the rate locked in for a period. Different loans have different lock-in periods for rates, but the common ones are one year and three years. Let us now compare these two on the basis of actual benefits available.

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