AmCredit offers housing loans in EUR and USD with an adjustable and fixed interest rates.

Borrowing from AmCredit, you can reduce the interest rate of your mortgage loan, paying a bit bigger origination fee at closing. Call us and ask!

Fixed and Adjustable rate mortgages. What is the difference?

A fixed rate mortgage offers you the security of knowing that your mortgage interest rate will not change during the term of your loan, there is no need to wonder where the rate will go by the next year. Banks mostly provide the fixed loan products up to five years.

An adjustable interest rate changes periodically, usually in relation with an index, and monthly payments may go up and down accordingly.

Banks generally charge lower interest rates for adjustable margins than for fixed rate mortgages, your adjustable interest rate could be less expensive over a long period than a fixed rate mortgage. On the other hand, you have to keep in mind the risk that an increase in interest rates would lead to higher monthly payments in future. You get a lower rate with adjustable margin in exchange for assuming more risk.

An adjustable mortgage rate on your loan changes at predetermined times, typically every three, six or twelve months. With an adjustable rate, the interest rate is determined based on an index. These indexes usually go up and down with the general movement of interest rates. If the index rate moves up, so does your mortgage rate in most circumstances, and you will probably have to make higher monthly payments. On the other hand, if the index rate goes down, your monthly payment may also may go down.

To determine the adjustable rate margin (ARM), lenders add to the index rate a few percentage points, called the "margin". The amount of margin can differ from one lender to another, but it is usually constant over the life of the loan.

You should choose an adjustable rate margin when you want a lower initial monthly payment than a fixed rate mortgage can usually offer. You should also choose an adjustable rate margin if you think interest rates may be headed down within the next few years. Borrowers who choose adjustable rate mortgages typically are individuals who are willing to accept some risk; while annual payments may adjust down, they may adjust up.

A good alternative is a fixed-to-adjustable rate mortgage, which offers an initial fixed rate period, then converts to an adjustable rate.