New Delhi, Sept. 13 -- With the Reserve Bank of India (RBI) holding the repo rate at 5.25% for a fourth straight time at its August monetary policy review, borrowing costs are at their lowest since around mid-2022.

That makes the choice between a fully floating-rate home loan and a hybrid loan more consequential. Some banks have begun offering semi-fixed products at competitive rates, partly as they look to deploy excess liquidity following a record wave of foreign currency non-resident (bank) or FCNR(B) deposits.

These are fixed deposits that non-resident Indians hold with Indian banks in foreign currencies such as US dollars. In June, under a special RBI scheme, banks were allowed to offer higher interest rates on these deposits, attr...