If there are 1-6 years left in the mortgage, operate at the floating interest rate, and then repay it in full and on time. Domestic LPR shows a downward trend in five years, which is related to the overall economy of China. All countries are cutting interest rates to stimulate their economies, so the decline of LPR is certain. If there are more than six years left in the mortgage, it will be better to choose a fixed interest rate.
Generally speaking, the advantages and disadvantages of floating interest rates and fixed interest rates are uncertain, and there is no way to evaluate them without considering the environment. Users who have purchased commercial mortgage can choose to change it to fixed interest rate or LPR floating tax rate. It should be noted that it will not change after selection.
1. Fixed-rate mortgage loan: refers to the interest rate that remains unchanged throughout the loan term. (Please note that the mortgage payment may fluctuate with the change of your property tax or homeowner's insurance, because these expenses are usually included in the loan payment. )
This is the most popular loan type because it provides predictability and stability for borrowers. Banks usually charge higher interest rates for fixed-rate mortgages than ARM, which will limit the housing prices that borrowers can afford.
Second, Pro advantages:
1, interest rate and payment remain unchanged.
2, strong stability, easy to plan the future. Homeowners can make clearer financial planning.
3, easy to understand. For first-time buyers, you may not know what 7/ 1 ARM with 2/6 cap means.
Third, the disadvantages:
1, if the interest rate falls, the borrower must refinance to get a low interest rate. But the borrower needs to pay the loan fees and costs again.
If you don't refinance the loan, you may pay more interest during the loan period.
3. The loan schemes offered by different banks or brokers are similar. Can't be customized according to the needs of customers.