Connection between adjustment frequency and financial risk for the borrower
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quent
Apprentice
Joined: 17 May 2007
Posts: 3
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 Posted: 07/28/08 - 09:07 Post subject: |
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| Good morning people. My name is Alex and I would like to ask you about variable mortgages. I am interested in them since I’ve heard that they are cheaper, but I am also worried about changes in interest rates. Is there a connection between adjustment frequency and financial risk for the borrower in this case? Thank you for the posts. |
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gloriane
Apprentice
Joined: 26 Dec 2004
Posts: 6
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| Posted: 08/26/08 - 23:03 Post subject: |
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| Hello Alex. When it comes to variable mortgages, they are cheaper than fixed one, so I would recommend you to choose them. Lower interest rate can be quite helpful sometimes. There is a connection between adjustment frequency and financial risk for the borrower, but it is not significant. Interest rates do change, but they are capped. It means that you have limits on interest rate which they cannot cross. You can also have caps on monthly payments, which is another form of protection. So basically, you don’t have to worry that the interest will rise so much that you won’t be able to pay back your mortgage. That is not very likely to happen. Well, I hope that you will manage to find the right mortgage deal for you. Bye! |
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