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Fixed interest does not mean every aspect of a loan is fixed
The rate label concerns an interest mechanism, not necessarily account fees, add-ons or consequences of a changed schedule.
Other clauses can remain important even where ordinary interest is stable.
Read the agreement by function rather than allowing one reassuring word to summarize it. A fixed-rate offer still needs its own conditions, security and repayment obligations examined.
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Definitions
- Nominal interest rate
- Stated rate used to calculate interest under the agreement; it does not describe every other charge.
- Annual comparison measure
- Annualized disclosure used to compare borrowing costs; its calculation and included charges depend on the jurisdiction and product.