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Which Is Better, Fixed Or Floating Mortgage Interest?In the shopping center, you may often see motor vehicle credit promo that mention umpteen percent fixed interest. Why would it be a promo? It could be, it's because the rates at which is relatively lower than market interest rates. Or, it could be because usually the vehicle using credit interest rate is floating (floating).[pictures]In General, the bank offered credit interest there are two types: fixed rate (fixed) and flowers floating (floating). Floating interest means interest rates are charged on your loan will vary in accordance with the movement of interest rates in the market. Fixed rate, by contrast, is fixed even though the interest rate on the market will go up or down. Which is more profitable? Yes, it depends how many percent interest credit offered. The fixed interest rate could be higher than the floating interest rate offered during the same time, but there is always the possibility of some months later, flowers floating ride height up to above the fixed interest rate.Advantages and disadvantages of fixed mortgage interestExcellence mortgage interest is a fixed value that is not changeable. If you are someone who wants a clear financial planning, then mortgage interest still is suitable for you. You can plan early on how big is your monthly income that will be dedicated to paying credit interest charges. The risk of borrowing money from a bank with a fixed interest rate lower than the floating interest rates.However, if you have many users choose loans with fixed interest, you can't complain when, for example, interest rates on the market to come down and be lower than the interest you have to pay. Let's say you and Your friend take a car loan in time together. The difference is, you take the credit, whereas fixed yield fella you take flowers floating. In the beginning, you've agreed fixed interest of 10%. Your comrades take credit early repayments by paying a floating interest rate of 12%. Then, you can assume that you are lucky. But in the months that followed, there was a trend of decreasing interest rates, repayments until some late comrade you just need to pay interest of around 8%. This is something that might happen, given the interest in the market is changing dynamically.Dynamics Of Floating Mortgage InterestWhen compared with the fixed credit interest rate, then the risk of loans with floating interest rate is relatively higher. In the example case above mentioned that floating interest can decrease over time. His theory is indeed so. But in practice, the floating interest more often rises than falls.One of the benchmark credit interest assignment is the reference interest rate of Bank Indonesia (BI Rate). The BI Rate cuts is at the beginning of the year 2012, from 6% to 5.75% and would not necessarily be followed by cuts in the interest rates of credit by banks and lender. Since the beginning of 2013 BI Rate thus increase gradually. The increase in the BI Rate is of course will be reflected in the credit interest rate is floating. Other factors that can result in credit interest to float up or down is the policy of the Government. When the Government wants to promote housing and give credit in bloom lightly, then with a certain category of subprime mortgages could decline. When the Government wants to reduce the number of motor vehicles in Indonesia, say in order to reduce the pollution, then the Government can tighten up the credit requirements of the motor vehicle, and thus make the mortgage interest rises.
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