We are already getting better with fixed rate payday loans


Do you have a variable rate mortgage? To make long-term repayments easier to plan, you may want to consider converting your current loan to a fixed rate. What is a fixed interest rate?

A long-term payday loan with a fixed interest rate, also known as a fixed term, is a predictable and transparent contract. With such a loan, for the entire duration of the fixation, you know for certain that the installment will not change as it is not exposed to the effects of changes in market interest rates. In contrast, in the case of floating rate mortgages, the installment will also change with the evolution of interest rates. The change may occur every three or six months, or even every year, but it is certainly not possible to forecast changes in interest rates, including installments, over the longer term.

What are the reasons for interest rate changes?

Changes in interest rates are influenced by domestic and foreign factors, such as economic, trade, political and inflationary processes. The system of national and international economic processes is very complex, so it is possible to predict the impact of an event on the central bank base rate, but it cannot be predicted with certainty. Changes in the central bank base rate are forcing commercial bank interest rate cuts to have a direct impact on mortgage rates and thus on monthly installments.

Why are Fixed Rate Loans? The 2008 economic crisis has shaken the whole world. As a result, not only the National Bank of Hungary, but also commercial banks and loan applicants have learned the lessons of the crisis and the ethical and well-considered side of lending has come to the fore. Since then, banks have been launching products in which customers have been paying off their installments for years. By doing so, credit institutions take on the risk of interest rate changes over a long period of interest as a valuable service.

Why is fixed rate better until maturity?

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To help borrowers better plan their financial future, at the initiative of the National Bank of Hungary, banks will not only offer fixed-rate mortgages, but as a helping hand, with specific, preliminary and practically tailored information, calculations and they will provide facts to support their clients in moving from a variable to a fixed rate.

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