In the last quarter, we have read a lot about the various fixed loans and their benefits. But have we noticed that many people do not know what a fixed loan is? What makes you good? What makes any significant difference between bank offers? Well, for any such question, the concept of the interest period will answer us. So let’s get to know each other and solve a few secrets!
What does the loan repayment installment depend on?
In fact, the most important factor is the loan rate itself. It has been written many times in the past that the default interest rate consists of two parts. These two are the base rate and the interest premium. The base rate for Hungarian loans is the central bank base rate, which is (still) 0.9 percent.
This comes with the interest rate premium, which is regulated by the market. This is how mortgage rates currently come out with 3-5% interest rates, which are cheap. For 10 years, this has often been three times the interest rate. But how long can we expect the same repayment?
The interest period
This concept covers the period of time during which the interest rate of our loan and thus the installment installment remain unchanged.
For example, it is easy to imagine that the central bank base rate will increase in the next 5 to 10 years. That would mean that the interest on our credit would jump up with it. Unless our interest period is still up. Let’s count one!
The calculator of Good Finance knows this too
With our favorite calculator, consider a $ 13 million 20-year loan with a 3-month interest period and a 10-year loan. The best deals are:
Goodbank gives us a loan of HUF 67,315, with a APR of 2.38% and a 3-month interest period. For a 10-year period, the Budapest Bank’s Qualified Consumer Friendly Loan is the first we see for $ 25,000 a month and a APR of 4.69%.
Suppose in 5 years the central bank base rate jumps to 3.5%. The interest rate on the first loan jumps to 6.2%. While this latter loan does not affect us. From now on, we have to pay $ 89,480 over a 15-year period. And even more in the event of further increases. This is the power of the interest period, it protects you from a monthly increase of HUF 20,000.
Feel free to ask us a question! We’ll give you every opportunity to make the best decision.