Doubtful offers that seem tempting can result in a double burden for the distant future, as the interest rate is not the only decisive factor. Differently high interest rates are agreed for a different time, distinguishing between variable and fixed interest rates. The variable interest rate adjusts to the interest rates of the free market, whereas the fixed interest rates are fixed only for a certain period of time. The borrower can decide for himself whether and how long he wants to set the interest rate on his loan.
The loan granted
The loan amount should be the same for a comparison in all offers, because it depends on the monthly installments. Therefore, a serious comparison of bids on bugs fixed monthly based loan rates . How high these are depends not only on interest, but also on the repayment amount. The calculator of a financial advice therefore adapts the repayment rates so that even with different interest rates the monthly burden can remain the same.
The residual debt is a point of view that every comparison of offers should focus on. It matters a lot how high the debt is when the interest rate lock has expired. Thereafter, the borrower must renegotiate with his bank. Arrived at this point, it is easy to see which provider has the better conditions.
The accrued interest
If a client wants to know if it pays to fix interest rates for a longer period of time and then put up with an interest charge, an offer calculator should be used. The decisive criterion is the residual debt. It should be the same after the expiration of the period. If the customer selects the shorter interest rate offer, he needs follow-up financing. The interest level can increase to a maximum by then. This is an incalculable risk, which the customer has to accept if he decides to a shorter interest rate. However, one percent difference should not be a reason for most borrowers to forego the security of a longer fixed interest rate.