OH for simplicity. Remember the time when mouse meant a small furry animal instead of a small plastic device!

My friend Harish Mistry felt this need for simplicity acutely when he applied for a home loan and chose to float. Now, 10 years ago, floating was what you did while relaxing on azure blue waters!

There was nothing remotely relaxing about the kind of floating he opted for. His floating rate ICICI Bank loan was at 7.5 per cent per annum. It had now touched 10.5 per cent per annum.

• Also read: Original documents for home loans, a must

This April, the bank announced a one per cent hike. Harsh now wanted to switch to a fixed rate of interest, which meant shelling out another one per cent.

So that means 10.5 + 1 + 1 = 12.5 per cent pa.

Should he? He is confused. And so, we reckon, are you. Let's get some clarity.

Interest rates have been fluctuating wildly over the last six years. In March 2000, interest rates on home loans were at 14 per cent pa, which started falling quite steeply.

By the last quarter of 2003, the interest rate (floating) on home loans fell to seven per cent pa, only to zoom to 10 per cent pa in January 2007.

Must read: Got spare cash? Will pay home loan!

What should a home loan consumer do?

If you float, it could mean a cheaper home loan rate -- but with the risk of being hit by a big increase in the future. If you remain fixed, you could be paying a huge premium today.

Eventually, the choice is yours. But here is some help along the way.

Photograph: Associated Press/Vincent Yu

Apnaloan.com is an online guide for those who seek retail loans. Apnaloan also helps loan consumers to get best rates by making banks compete for their loan.