Mortgage loans : fixed interest rates or floating interest rates

How different between fixed rates and floating rates

When you are about to apply for a mortgage loan, you might be wondering about the interest rates in which types of interest rates you should choose: Fixed or Floating

Mortgage Loans : Fixed interest rates (Fixed Rates).

The fixed interest rate will be paid to the lender at the same equal rate as the duration of the Mortgage loan agreement. There is no change of cost each month. For example, if you determine the interest rate of the mortgage loan at 4%, you will have to pay at 4% until closing all the payment (15 years or 30 years as your mortgage loan agreement).

Mortgage Loans : Floating interest rates (sometimes it’s known as variable Rates or adjustable rates).

The floating interest rate will be paid to the lender at various rates based on the cost of finance. As stated in the contract, such as loans for housing of a bank to pay interest at the rate of MLR-2% during the third year onwards.

Mortgage Loans : Which rate types is better?

The advantages of fixed interest is Do not have to pay the interest more expensive when there is in the situation of lender’s higher costs. In the contrary, if there is in the situation of falling financial cost, the declaration of financial interest (the reference rate is MLR or MRR) is a disadvantage because the rate will be more expensive than paying interest reference rates.

There are many advantages of floating In particular, the reference rate down to make us pay interest. So we did not specify that the interest is best because you can not predict the future of interest rates. Unless fixed rate financial institution requiring very low. In order to stimulate borrowing (promotion) as 0%, 1% and so on.

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