Then you are faced with the choice: do I set my mortgage interest rate or do I opt for a variable mortgage interest rate? If you are opting for a fixed mortgage interest rate, you must then determine how long you will fix the interest. There are different fixed-rate periods, ranging from 1 to 30 years. But when is it advisable to set the interest rate for a longer period, and when is a short fixed-rate period preferable?
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How long to fix mortgage interest?
The choice for a short or long fixed-rate period depends on a number of factors. For example, current and expected future mortgage rates play a role. If you expect that the mortgage interest rate will rise in the coming years, then it is wise to fix the interest rate for longer. If in that case you opt for a short fixed-rate period and the mortgage interest rate rises, then your monthly charges will also increase in the future. Conversely, the same applies: if you think that the mortgage interest rate will fall, then a short fixed-rate period is advantageous.
Tip! Contact a mortgage adviser if you are unsure whether you should opt for a short or long-term fixed-rate period.
How long to fix mortgage interest? – Personal situation
In addition to the mortgage interest rate, your personal (financial) situation is also important. Do you want and can you afford to take a little more risk, or do you prefer more certainty? If you opt for a shorter fixed-rate period, keep in mind that your mortgage payments may increase in the near future.
Tip! You can also choose to split your mortgage into different fixed-rate periods. This is how you spread the interest rate risk.
How long to fix mortgage interest? – Benefits Long period
- Monthly charges are the same for a long time: more certainty
- If interest rates rise in the future, you will not be bothered by this
How long to fix mortgage interest? – Short-term benefits
- You pay a lower mortgage interest
- If interest rates fall in the future, you can benefit from this sooner