Long-term fixed-rate loans are becoming available at more and more banks: as the current base rate may remain in place until the end of 2017, mortgages are typically taken for several decades.
However, we cannot calculate our interest rate over this time period, but a fixed rate loan will allow us to calculate our installments throughout the term.
Short-term loans ( such as personal loans, consumer loans, and possibly higher commodity loans ) are worth floating interest rates, as the Daisy Bank announces that the current base rate will remain at the end of 2017 (1.35%). However, for long-term loans of 15-20 years, you should not even consider choosing a fixed installment . Although the base rate is low now (and it is reported to remain so), experience from the past 20 years shows that the current situation may change in the next few years. Fixed-term loans are a common product, but real security can come from fixed-term loans .
What about 10 year fixed rate loans?
10-year loans are typically non-fixed interest rate loans, but due to the 10-year interest rate period they can also provide security . If you choose a fixed rate loan all the time, you may want to consider at most insurance coverage (such as unemployment or life insurance). However, for loans with a shorter interest rate period, it is worthwhile to start a home savings fund with a maturity equal to the interest period, so that you can prepay your loan at the interest rate turnaround. Then we can decide:
- the installment is reduced or else
- the maturity is reduced.
Of course, a combination of the two is also possible: with a shorter maturity, we choose a lower installment . Reducing the installment installment can be beneficial mainly if our monthly installment increases significantly after the interest rate turnaround.
A lot of people are affected not just the bar listers. Why is that? Because you may need a larger amount of freely available money that you do not necessarily want to use on the financier’s nose…
Long-term fixed-rate loans are becoming available at more and more banks
As the current base rate may remain in place until the end of 2017, mortgages are typically taken for several decades. It can be said that so far in 2016, so far, the loans have been all about CSOK and home loans. However, a wide range would still need traditional free-to-use loans, especially when it comes to BAR listings.