Look at effective interest rate on home loan offers

Availing of ICICI Bank's cashback offer will mean you lose the flexibility to switch or prepay the loan

Indian home loan borrowers, typically, are a scared lot. Despite the tax benefits — Rs 2 lakh annually on interest paid (Section 24) and Rs 1.5 lakh (Section 80 C) on principal repayment — they choose to prepay their home loans. According to industry estimates, the average holding period of a home loan is 8-10 years.     

Against this backdrop, ICICI Bank’s latest scheme offering one per cent cashback on each equated monthly instalment (EMI) to its home loan borrowers for loans with a tenure of 15-30 years, is interesting. The conditions for getting this benefit: Neither can you