# Fixed or floating interest rate?

All debtors can choose between fixed and floating interest rate, alternatively a mix of both.

All debtors can choose between fixed and floating interest rate, alternatively a mix of both.

The floating interest rate changes according to the general interest rate level. The interest rate can be changed every 2 months. In the event of a rise in interest rates, the Housing Bank will notify you of this approximately six weeks before the change takes effect.

- Your interest costs will decrease according to reductions in general interest level.
- You have more options concerning changes in repayment plan.
- You may choose to change to fixed interest rate at any time.

- Your interest costs will increase according to increasing general interest level.
- You are not able to predict your future interest costs.

If you choose a loan with a fixed interest rate, you are tied to the same interest rate for 3, 5, 10 or 20 years (the lock-in period). The commitment period can not be longer than the remaining term of your loan. This means that you cannot choose a 20-year fixed-rate agreement if you only have 15 years left to repay your loan.

- Your interest costs are predictable within the fixed agreement period.
- Your repayments of interest are set during the fixed agreement period, even if the general interest level increases in the same period of time.

- Your repayments of interest are set during the fixed agreement period, even if the general interest level decreases in the same period of time.
- You have less options concerning changes in repayment plan.
- There is a risk that you will have to pay a penalty fee in certain situations (see below).