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A no-change scenario is an illustration of how floating or variable rate home loans will look like on an amortization schedule assuming index rates will not change.
This is an almost impossible scenario over w 20 or 30 year period. Which could be the tenure of a borrower’s loan.
Such elaboration done by bankers and brokers should only be used as an explanation of how monthly payments would be calculated, making up principal and interest.
Borrowers who are new to mortgages might find it helpful.
However, just like a historical scenario, it is never a good way to estimate or measure how interest rates will be like in future as nobody can predict how index rates will fluctuate.
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