With an interest rate collar on your loan, you no longer have to worry about interest rates rising, as you will have secured your loan against large fluctuations in its reference rate. It is actually worth locking in an interest rate collar at the current favourable interest rate levels while they are still low. This will allow you to continue to enjoy the current low rates in the future, securing the monthly payment on your loan for years to come!
You can be sure that there will be no unexpected changes in the monthly payment on your housing loan, as it will remain within the agreed limits throughout the hedging period.
If you opt for an interest rate collar, you won’t have to pay a separate hedging fee like with other hedging products.
The monthly payment on a housing loan is typically the largest individual expense in a household. By hedging against the interest rate risk, you can keep your monthly payment under control.
If your loan has an interest rate collar, you can flexibly change your loan’s repayment schedule. This means that you can add instalment-free months to your loan, for example.
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