The choice between fixed and variable interest rates is one of the key decisions when taking out a loan. A fixed interest rate provides predictability, as the monthly installment remains the same throughout the repayment period. A variable interest rate, however, is usually composed of EURIBOR – the key reference interest rate for most residential mortgages in Slovenia – and the bank’s mark-up.
This can cause the monthly cost of the loan to increase or decrease over time. In banks with long-term loans, especially at 20 or 30-year terms, they emphasize the importance of stability and predictability. Some banks do not offer fixed interest rates for the longest terms or limit them, and recommend combined models where the initial period is tied to a fixed interest rate.
For shorter terms and n
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