Fixed Rate v/s Floating Rate In case of fixed rates, if you take a home loan for ?y? percent, the rate of interest will be ?y? percent for life. On other hand, in case of floating rate home loan, the rate of interest may be charged at RBI base rate or according to your bank?s own benchmark rates. It?s tough to figure out which is the better option, it actually depends on financial condition of the borrowers, the repayment structure and amount of loan. If the existing economic situation is that lending rates are at their lowest in many years, you may want to consider a fixed rate to get the benefit of the low rates even when they go up in the future.