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This is definitely country-dependant. In Sweden you can pay extra with no penalty if you're on a variable rate, so if you have the means, the best option financ
by rockbruno 4y ago
This is definitely country-dependant. In Sweden you can pay extra with no penalty if you're on a variable rate, so if you have the means, the best option financially speaking is to go with variable and pay it off as quickly as possible (or at least enough to make the raise in interest to be negligible).
- matwood 4y agoMost mortgages in the US can also be paid off with no penalty - fixed or not. A purchaser should prefer fixed if they are available, and only use a variable rate loan for specific circumstances. The low rates of the last few years compressed the rate difference between fixed and variable, that it made almost zero sense to get a variable rate loan.
- rockbruno 4y agoI see, that's the difference then. In Sweden the fixed ones penalize you for paying extra.
- matwood 4y agoIn the US some can have prepayment penalties, but it's not common. All the loans I've ever been presented (car, house, etc...) were simple interest loans. I would never sign one that was anything other than simple interest.
- lbschenkel 4y agoYes! I always choose the variable rate for this reason alone.