interest rates
- Created by: Share63
- Created on: 28-05-16 11:15
View mindmap
- Interest Rates
- Variable
- Advantages
- Repayments reduce when interest rates fall
- Additional repayments can be made without penalty
- Shorten the term of loan if repay at higher rate
- Additional repayments can be made without penalty
- Repayments reduce when interest rates fall
- Disadvantage
- If interest rates rise-repayments will rise
- Advantages
- Fixed
- Advantages
- Predictable payments
- Protection from rise in interest rates
- Predictable payments
- Disadvantage
- No benefit if there is a fall in interest rates
- Early payout penalty
- No benefit if there is a fall in interest rates
- Advantages
- Long term
- Short term
- Higher interest rates
- Combination
- Interest fixed for inital period then reverts to variable
- Hedge against interest rate rises
- Interest fixed for inital period then reverts to variable
- Split loan
- Part fixed and remaining is variable
- Hedge against interest rate rises
- Part fixed and remaining is variable
- Comparison Rates
- loan interest rates calculated after adding fees and charges to the lenders advertised rate
- Personal investment strategy
- To achieve highest return for most acceptable risk
- Switching from one investment product to another
- Rising interest Rate
- Savings
- borrowing
- Risk of default
- demand for property drops
- Falling interest rates
- savings
- borrowing
- Demand for property rises
- Rising interest Rate
- Switching from one investment product to another
- To achieve highest return for most acceptable risk
- Variable
Comments
No comments have yet been made