If I borrow 200k from a bank or building society to buy a house in say 2018, why is the interest rate on that loan variable for the next 25 years? Shouldn’t it be the internet rate when the bank loans the money to me.
If the bank has loaned me money when interest rates are low, then interest rates go up, aren’t they just creaming off a whole load of profit from me?
In: 10
You can get what is known as a fixed rate mortgage, where the interest rate is guaranteed for a number of years, the problem is that rate is generally higher then the variable rate and if interest rates fall you may much more than people on a variable rate.
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