Against the background of the accelerated growth of ROBOR, the indicator for the calculation of variable interest rates on ROL loans, there are also evidences of tangible fixed-interest loans, which are in the portfolio of many local banks.
Although they have slightly higher interest rates than ROBOR-based loans, fixed-interest loans may soon be an asset to those who contract them if ROBOR continues to grow.
Here are some of the benefits and possible disadvantages of contracting a fixed interest loan.
*The benefit of a fixed rate and a variable rate – Fixed interest loans have the advantage of not having floating rates, because the costs they include are fixed, so the borrower will know from the beginning how much he has to pay. It is one of the strengths for which this type of credit can be contracted by a person who wants to have a firm income management.
On the other hand, in the case of variable interest loans, the advantage is that when Robor decreases decreases and the credit rate. It is best that when you contract the loan you analyze two aspects: what is the interest difference between the two loans, which is the variable interest rate of the last time, and what is the risk that the variable interest rate rises above the fixed level. It only remains for the future to confirm that you have made the right choice.
Choose the appropriate personal needs loan according to the interest rate – According to the Conso.ro portal, the difference between the annual effective interest rate of the cheapest variable interest rate loan and the cheaper fixed interest loan is currently under 2 percentage points. The difference between the monthly installments of the two credits is about 10 lei.
More and more financial analysts are of the opinion that ROBOR will increase by at least 1.5 percentage points in about a year, with the current figure at 1.8% per annum for the three-month indicator. As personal needs loans are granted for a maximum of five years, it is possible that from the beginning of the lending period, fixed-interest loans contracted during this period become more advantageous than those with variable interest rates. Instead, there is also the possibility, it is right, less considered by specialists, to witness a capping of ROBOR. In this case, variable interest loans will remain more advantageous than those with fixed interest. These costs must be balanced by each debtor who makes the decision to contract a loan.
Fixed interest mortgages might be more advantageous – When it comes to contracting a mortgage, up to 30 years, the interest rate option is all the more important, because in this case we are talking about higher rates. At the same time, an increase in the rate may affect the debtor for a longer period of time as these loans are granted for 20-30 years.
There are mortgage offers on the market with fixed interest rates in the first five years, the cost being rather low and close to that of variable interest loans. These can be an option for those who want to have no surprises in terms of rate, at least for a while. Subsequently, after the five-year period, interest on credit becomes variable. If, in the meantime, market conditions have changed and this interest proves to be above the market average, a refinancing may be required.