A
fixed rate loan (ie Islamic loan offered by
banks by as well as loans offered by AIA and
ING) is best for people who are risk adverse
and want the security of knowing their
repayments. It does not matter if the
interest rate increases. The advantage of
fixed rate loan is if the interest rate
increases, you will save substantially on
interest costs. Likewise if interest rate
falls, you will end up paying more in
interest compared to a floating rate loan.
Interest rates have recently been increased
for the first time in six years and it is
likely that interest rates will increase further. It
is advisable to lock in the interest rates
on your loan now
