Parent Category: ROOT
Category: mortgage
Created: Tuesday, 28 January 2020
Last Updated: Tuesday, 28 January 2020
Published: Tuesday, 28 January 2020
Written by Paul Crosby

Loans helps you in meeting your financial need. Mortgage loans are secured loans that give you the opportunity to complete any task that requires money. For taking mortgage loans you need to know about mortgage rates.

There are two types of mortgage rates, Fixed rates and floating rates.

If you take fixed rate loans then you have to pay same interest rate for the whole tenure of the loan, irrespective of what the market rates are. Your payments will remain same in every situation, whether the market interest rates go down or up. Thus, you are in a situation to predict the actual interest that you have to pay.

On the other hand, floating interest rates keeps changing based on the benchmark rates. You will be charged either on the minimum lending rate (MLR) or the minimum retail rate (MRR).

**Which is best?**

The question obviously arises that which mortgage interest rate will be best for you? In fixed rate you can predict your interest amount, but if the market interest rates fall you cannot take the advantage. Similarly, you will be in a good position when the market interest rises.

Now, whether to choose fixed interest rate or flexible interest rate, is a question. If you want certainty and predictability, then of course you must avail fixed interest rate. Many times, it is found that the flexible interest rates start at a lower rates than the fixed interest rate. If the markets rates are going down, then you can take advantage of the situation.

Even in Thailand there are two types of interest rates prevailing. If you want to take loan there, you must check out the prevailing interest rates as it keeps on changing every month. Last year that is in 2019, the interest rates were quite high and rose even up to 7%. However, last December it was 6.75% and it have been same for last two months, that’s November 2019 and December 2019.

The MRR keeps changing and thus if you are taking flexible interest rates then you should be prepared to face the uncertainty due to change in the mortgage interest rate. According to the econometric models it is expected that the prime lending interest rates in Thailand will stand at 7% during 2020. At present it is low but with time it is expected to rise to 7% and stay there for the year.

From the period of 1989 to 2019 it is found that the lowest mortgage interest rate was 5.75%. to this the highest mortgage interest rate had been 16.50%. from this it is quite understandable that the present interest rate of 6.75% is on the lower end and it can rise. However, predictions say that the interest rates will be around 7% during the year 2020. If you want to take mortgage loan you must seek it now as the rates are quite competitive now. Just make sure you take the right decision, fixed or floating.

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