Posted by: islamicfinancingnews | May 23, 2013

Variable rates and Islamic loans: What You Need To Know

islam-31 Getting the right Islamic mortgages is a lot easier when you know a little bit about mortgage rates in general, the product choices that are available to you, and how this information can affect the overall Islamic loans products available on the market today.

Variable rates are one of the terms that many people hear about but not everyone understands. Although your Islamic mortgages will keep you free from riba, it’s a good idea to understand how variable rates can affect the amount of money you need to pay on your mortgage.

Basically, it’s all about the interest versus the amount that is applied on the principle when you’re dealing with variable rates. For borrowers who are more adventuresome, this may not be a good idea since they can pay more off on the outstanding debt when rates are low. On the other hand, people taking advantage of variable rates need to keep an eye on market fluctuations and those times where mortgage rates go up since they will be paying less off.

Variable rates are one of the components of Islamic loans you need to be aware of so you can make sure your money is put to good use.

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