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Adjustable rate loan (view source)
Revision as of 13:44, November 13, 2008
, 13:44, November 13, 2008→Home loans
Ex. A loan may start with 2.9% rate tied to the prime rate + 2%. The loan will readjust every 6 months with a maximum increase of 2 percent per adjustment. The loan cap is 15.9%
Ex. A loan may start with 2.9% rate tied to the prime rate + 2%. The loan will readjust every 6 months with a maximum increase of 2 percent per adjustment. The loan cap is 15.9%
Home loan interest rates can be linked to the general interest rate. When interest rates rise people may suddely find that they can't afford their mortgage repayments of have to cut back other expenses and reduce their living standard drastically. When large numbers of people cut back in this way this can reduce demand in an economy and trigger a slump or agravate an existing slump.
see [[Financial Crisis of 2008]]
see [[Financial Crisis of 2008]]
[[Category:Finance]]
[[Category:Finance]]