Home Loan Equity and Mortgages

Variable rate depends on the official interest rate set by the central bank of each country. This rate in conjunction with the banks spread forms the interest rate. This variable rate can fluctuate depending on central bank strategy, by cutting interest rates, there will be a reduction in repayments and increasing interest rates means an increase in repayments to your lender.

Fixed rate is a fixed interest rate set by the agreement with your financial institution; this rate is set for the life of the loan period agreed upon with your institution. This means you will have a set repayment to pay consistently through the life of your loan.

Labels: Home equity loan, Interest rate