glossario

FIXED Interest Rate

When the interest rate on a loan (usually a mortgage) is fixed, it remains unchanged for the duration of the mortgage.

The disadvantage of this type of mortgage is that the borrower cannot benefit from any reduction in market rates that may occur over the life of the mortgage.

A fixed-rate mortgage is recommended for those who worry that market rates might rise and, when signing the contract, want to be sure of the amounts of the individual payments and the total amount of the debt to be repaid.

To offset these advantages, the lender often applies more onerous conditions compared with a variable-rate mortgage.