Opting for variable interest rates: the pros and cons
In some situations, opting for a variable mortgage interest rate can be beneficial:
- Your repayments are free from penalty charges (useful if you’re soon planning to re-mortgage or make other amendments to your mortgage)
- If the interest rate drops, you will immediately see a lower monthly repayment figure for the next month
- You can still fix the interest at any time
A variable interest rate also has a few disadvantages:
- If the interest rate rises, you will immediately have higher monthly payments the following month
- You’ll have less certainty about your monthly repayment sum in the future
- You can borrow less than if you fix the interest for at least 10 years
Whether the choice for a variable interest rate makes sense in your situation depends on your specific situation. We can help you with that.
The difference with a fixed interest rate period
If you prefer more security, you can also opt for a fixed-rate period, whereby you fix the interest for a certain number of years, such as 10 or 30 years. Read more about the fixed-rate periods, and discover which type of interest rate is the best match for your situation.