Throughout the repayment of your Asa and Sabbath Ana Klot credit, you pay a fixed rate that the lending institution gives you in advance.
The rate is different from one borrower to another depending on the Euribor index which lowers or increases monthly expenses.
The capped rate is the variable rate that must be respected. It is the intermediary between the economy of the variable rate and the security of the fixed rate. However, the fixed rate is safer compared to the variable rate.
Indeed, with a variable rate, monthly expenses may be rising, and this increase does not allow you to find a balance in your budget.
When the rate is variable, the amortization table is no longer valid.
However, this rate may be cheaper than a fixed rate. For the prepayment, the variable rate is more affordable compared to the fixed rate. The monthly charges are less heavy especially at the beginning of the repayment. However, rates increase as you move forward. Borrowers may find themselves in a difficult position to cover monthly expenses.
So make sure you can pay the monthly payments even if they are up sharply if you choose variable rates. If not, you can lose your property that you have mortgaged.
The variable rate is the most recommended by institutions.
Indeed, with this system, they take less risk. Prefer a fixed rate to avoid the difficulties to take care of your monthly payments.
Choose a fixed rate and a fixed rate to know beforehand the monthly expenses that you owe to the organization. This rate allows you to regain some stability without the risk of not being able to pay the monthly payments in the variable rate. It is also beneficial if you want to repay over a long period of time, and you are not considering a prepayment.
It is an ideal solution also if the rates are low on the market.
Opt for a variable rate if you plan to repay your loans in less than 3 years, or if you have already thought about making an early repayment. This is a good strategy too, if your monthly budget allows you to cover fluctuations in monthly expenses. It is very beneficial too if the rates on the market are high.