Variable loan interest rate: is it a smart choice?

8 Feb

Are you looking for a mortgage loan, but you are not sure whether you should choose a variable interest rate or a fixed interest rate? Then we would like to give you some more explanation in these blogs. Go for the best choice.

Why a fixed interest rate?

Why a fixed interest rate?

Anyone who opts for a fixed interest rate plays safe. After all, you always maintain the same interest rate during the term of your loan. This is how you place the risk with the bank. If the average interest rate on the market rises, you will keep your favorable interest rate.

The reverse can of course also be true: if the average interest rate continues to fall, you are stuck with your fixed interest rate. Although you should not fear that at the moment. The interest rates on the market are today historically low.

That is why no less than 70% of borrowers now opt for a fixed interest rate. Why? For example, they sit in a comfortable chair when interest rates suddenly start rising again within a year or two.

Why a variable interest rate?

You take the risk yourself with a variable interest rate. If interest rates rise, your loan will become more expensive from the contractually stipulated moment at which the bank reviews your interest rate. Yet even that risk is limited by law, because the interest can double as much as possible.

Then why choose a variable interest rate? A loan with a variable interest rate will undoubtedly come out cheaper at the start of your term. And if interest rates continue to fall on the market, you also pay less interest.


As we mentioned earlier, the interest rate for mortgage loans is at a historic low. According to the interest barometer, the average interest rate for a twenty-year mortgage is now around 1.61%. Moreover, there is no change for the coming months.

If you do not want to take the risk that the interest rate will rise considerably in the coming years, you should opt for a fixed interest rate. If, on the other hand, you are not afraid of doubling your interest rate and you want to get the cheapest loan initially, you can opt for a variable interest rate.

And often you don’t even have to choose: it is quite possible to divide the term of your loan between a fixed and a variable interest rate. This way you can enjoy the benefits of both options and limit the risk.

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