Fixed Rates VS Variable Rates

Fixed Rates VS Variable Rates

Choosing the right home loan with the best interest rates can help you save thousands of dollars. It is so important to concentrate on comparing and contrasting home loans and rates to determine which one meets your individual requirements and needs before making your decision. Here are the main differences between fixed and variable rates…. Fixed Rate Home Loans A fixed home loan rate means you can establish a certain fixed interest rate. This means whether the interest rate falls or rises, you will have to pay the established fixed rate. Let’s see what are the main advantages to opting for a fixed rate home loan. • You can benefit from knowing exactly the repayments you will have to make, as well as the possibility of establishing your interest rate for a longer amount of time. • Opting for fixed rate home loan will make it easier for you to budget your future finances – you know the exact sum you need to pay. • If the rate rises above your paying interest, that won’t affect you in any way – you’ll be paying the fixed rate, which is less than the variable rate, so that’s a plus. Now let’s take a look at the main disadvantages that come with choosing a fixed rate home loan. • If the interest rate decreases, you will be paying your fixed rate that is more than the variable rate. Thus, you won’t be able to take advantage of the rate decrease. • You won’t be able to benefit from making unlimited repayments. Most banks have a capped limit of extra repayments that...