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Interest Rate Options
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Banks continuously offer special rate options in terms of identified areas, project development, company group schemes, professional people, etc. Various interest rate options are available. |
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Fixed Rate Option: |
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With this option you can fix the interest rate that you pay on your mortgage loan for a specified period of time, normally 12-, 18- or 24 months. This might be the best to opt for when you need to carefully plan your monthly budget. Should you, however, select this option, you will be contractually bound for a specific rate for a contracted period and would therefore not enjoy the benefit of a lower rate, should interest rates drop, untill such a time as the contract has expired.
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Variable Rate Option |
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This rate varies according to the Mortgage Base Lending Rate (prime rate). Should you qualify for a special concession, this concession should prevail for at least 2 years and this rate option might prove viable over the larger term.
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BA Rate Option |
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This rate is linked every quarter, to the 3-month BA SAFex rate, which makes it ideal for budget purposes. This option anticipates and leads the interest trend in a decreasing interest rate environment and maximises flexibility by allowing for prepayments, etc. Finally this option enables you to revert back to the Home Loan Base Rate option at the end of any 3-month period without incurring variation fees.
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Capped Rate Option |
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The capped rate option is an option securing your rate in an increasing interest rate environment by offering you the benefit of a variable rate, should interest rates drop.
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Feeling slightly confused ? Our consultant will advise you regarding the advantages and disadvantages of the various interest rate options in more detail. |
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