When is it Best to Apply a Variable Interest Rate?

A variable interest provides a sense of dynamism and that your loan is aligned with the market. Some people consider it riskier due to its changing nature. However, it can also be more rewarding. If you sign in times of financial abundance with interest rates, the moment the market falls so does the interest rate applied to your mortgage, and consequently so do your monthly repayments.

Variable interest rates are most advisable when the interest rate is usually high. This tends to happen in times of prosperity when the real estate market is dynamic and with houses being sold quickly. The higher the number of houses being sold, the higher the demand for a mortgage and therefore the higher their interest rates. As soon as the market experiences a fall or stagnation, the interest rates drop to the benefit of the borrower.