The HFF team worked on behalf of the borrower, a partnership between Advance Realty Investors and Greek Development, to place the 10-year,
fixed-rate loan with an institutional lender.
"The bank's loan counsellor I talked to last year recommended a
fixed-rate loan for my rental house.
A
fixed-rate loan will offer the same monthly payment for the entire life of the loan.
The RBI also allows banks to offer hybrid loan products - having both fixed and floating interest rate features with a higher proportion of
fixed-rate loan.
On average, the conforming 15-year
fixed-rate loan provides approximately 0.5% improvement in rate over a standard conforming 30-year
fixed-rate loan.
The average two-year,
fixed-rate loan with 90% LTV limit costs 6.09% - against 6.15% last August, or 6.48% a year ago.
co.uk said the difference between the interest charged on the average
fixed-rate loan and swap rates, upon which the mortgages are partially based, had reached the highest level since its records began in 1988.
The average cost of a two-year
fixed-rate loan has risen to 7.07% in the past two weeks, up from a recent 11-year high of 7.02%, says financial information group Moneyfacts.co.uk Lenders raised the cost of their fixed-rate mortgage deals in response to steep increases in swap rates, upon which fixed-rate mortgages are based, due to speculation that interest rates could rise because of inflationary pressures.
The
fixed-rate loan statistics and the other background information for this article have given us a broader basis for estimating the extent to which the public hedges against interest rate increases through
fixed-rate loans.
Federal student loans include a complex consolidation option that gives borrowers the opportunity to combine several loans into a single loan with a longer term to maturity and, for loans originated before July 2006, to convert from a variable- to a
fixed-rate loan. The consolidation option adds substantial costs to the federal student loan program.
Those with existing ARMs who are trying to decide whether to convert to a
fixed-rate loan should tally up conversion lees (which vary) and any prepayment penalties and closing costs, and compare the total to the maximum possible increase in monthly payments they'd be subject to if they kept the ARM for the remainder of the time they plan to be in the home.
This alternative offers you protection against rising rates with future flexibility to convert back to other financing options with a less onerous prepayment penalty than the traditional
fixed-rate loan.
