Variable Rate

What is a Variable Rate loan?

A variable rate loan otherwise known as a adjustable rate loan, is a loan that the interest rate change's over the period of the loan.

Is a variable rate loan better?

A variable rate loan is generally a higher risk option, where the rate is unpredictable.

What is the standard home loan?

Fixed rate loans are the most popular in the United States and a generally fixed for 15 and 30 years but outside the period they are fixed for is a lot lower.

What are the advantages of a variable rate loan?

If the interest rate rises while the borrower has a variable rate then the borrower must pay more for interest during that period

What are the disadvantage of a variable rate loan?

Variable rate loans are generally less expensive then fixed rate loans and if the interest rate drops then the borrower pays less interest for that period of time