Fixed
versus variable rate
Our consultant will advise you in regard to choosing your mortgage
rate. The principle matter to consider will choosing the term
of your mortgage and whether to choose a fixed or variable rate
mortgage. In addition we will need to consider all discounted
rate offerings available from lenders. Most lenders offer special
one year rates to new applicants.
Our
advice will focus on your long term needs and the expected value
over time of the mortgage product compared to other lenders.
Fixed
Rate
If you want certainty into the future in regard to your mortgage
repayments you can choose to fix your repayments.This certainty
comes at a price which is the difference between a variable rate
repayment and a fixed rate repayment.
Your
mortgage advisor will advise you of the alternatives and the cost
of the various options. Much depends on your risk profile, the
level of the mortgage and your income.
Future mortgage rates are uncertain and certainly today rates
are extremely low and serious consideration should be given to
fixed rate options.
You can set your rate for a fixed number of years on a pre-defined
term length. For example your rate may be 4.5% for 3 years. After
this time the rate will be variable.
Should
you wish to cancel your mortgage agreement (for the purposes of
moving house for example) then you may incurr a penalty for breaking
a fixed rate contract.
An
advantage of a fixed rate mortgage is that you are able to budget
for the next x amount of years and your repayments will not increase
during this time.
Use
our mortgage repayment calculator
to compare your mortgage repayments under varying interest rate
options
Variable
rates
If mortgage rates set to reduce or expected to stabilise at todays
levels then a variable rate may be the best option.
With a variable rate mortgage your mortgage repayments
will rise or fall in line with the mortgage interest rate set
by your lender which in turn are based on the euribor rate.
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