Home Loan Interest Rates :: Fixed? Floating? or Hybrid? Which Is Better to Opt?

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Hello Friends, I feel a need to discuss the interest rates of home loans in order to check out which one is best. There are currently three types of interest rates in the market: 1. Floating rate. 2. Fixed rate. 3. Hybrid rate. FLOATING RATE This interest rate is charged according to the deviation in the index rate, which can change due to changes in macro-economic factors such as decisions by the Reserve Bank of India. If the index rate increases, then home loan interest rate will increase. This increases the tenure of our loan because banks will try to keep our loan EMIs constant. Similarly if the index rate decreases, then the loan interest rate will decrease causing the tenure of our loan to be decreased. Essentially in a floating rate home loan, the bank passes on the risk of macro-economic factors to the borrower. FIXED INTEREST RATE Fixed rate home loans offered by banks in India are not guaranteed to be fixed for the entire tenure of the loan. Fixed rate home loans offer us rates that are only fixed for a few years, after which the bank has the right to increase the rate at their discretion. When market rates decrease the rates of floating rate home loans go down passing on the benefit to the customer; however, people with fixed rate home loans are not benefited. On the other hand when market rates increase the rates of both floating rate home loans and fixed rate home loans increase (This is because fixed rate loans have a clause which permits banks to increase the rate at their discretion after a few years). HYBRID INTEREST RATE This offers us a low fixed rate for an initial period, which is reset to a floating rate after the initial period. This has become very popular over the past year or so. One way to think of these hybrid loans is that they are the same as floating rate loans, but offer us a lower fixed rate for the first few years initially. From the above, we can see that in a fixed rate home loan, we pay a higher initial interest rate for the benefit of being shielded from the risk of rate increases, but we are actually exposed to these risks anyway as the bank can reset our interest rate after a few years. Additionally, we do not get the benefit of falls in market interest rates. I think fixed interest rate is not beneficial at all. What do you think? Floating interest rate looks better as there is equal chance of decrease in interest rate. But, hybrid interest rate has become extremely popular and has captured a huge share of the market over the past year. What do you think? Which is BETTER interest rate? What will you opt?