Fixed loan is an arrangement of the interest rate remained same from beginning of the loan until end. Many peoples preference to this loan cause no need to worry about the rate increment due to economy crisis.
This loan commonly found on home loans, especially the long term home loan. If the loan rate fixed for 30 years, you are keep paying the same interest and amount for 360 months.
Some benefits of the loan
1) Risks decreased due to the rate locked for whole tenure of the loan, this option is very suitable for 1st time home buyer.
2) Secure long-term planning - Since the monthly payment remaining, you will able to plan carefully of the property tax and insurance.
3) Budgeting and control your expenses - no need to bother about the rate jumping and thus your monthly expenses is likely to monitor.
Other than 30 years term this fixed rate loan also available in 10 years and 15 years term. But the interest charged among options are vary.
Unlike the fixed option, adjustable loan rate might be appropriate for investor. The loan rate is very low for the first 3 years, and it might increase according to the market.
A lot of home owners will seek for refinancing for their home loan after several years. Before venture to refinance, you must make sure that the refinance rate offer is lower than your existing loan rate. And the remaining balance of the loan debt is still large.
For more home loans information please check out Home Loans Guide instead of Fixed Loan
or Various Loans Guide for other loans information.
Return to Loan-God Home Page
Return to top of the page