What's the difference between a fixed-rate and a variable-rate home renovation loan?

The main difference between fixed-rate and variable-rate home renovation loans is how the interest rate is determined over the loan's tenure.

In a fixed-rate renovation loan, the interest rate remains constant throughout the entire tenure once decided at the time of the beginning of the loan. Your EMI also remains the same, providing stability in your repayment calculations.

In a variable or floating-rate loan, the interest rate changes periodically in alignment with market rates or the loan provider’s internal benchmarks. For instance, it may be linked to the Marginal Cost of Funds based Lending Rate (MCLR), which banks revise annually. Accordingly, your EMIs also change."