2 min read
Compares total cost and monthly payment of two offers side by side.
What fixing actually gives you
A fixed-rate period locks your rate — and therefore your payment — for a set span, insulating you from base-rate rises. It is budgeting insurance: you know exactly what leaves the account each month.
What it costs you
Fixed rates usually start above the equivalent variable rate, because the lender prices in the risk of rises. You also give up the benefit of any falls, and exiting early can trigger a break cost. When the fix ends you roll onto the reversion rate.
When fixing tends to win
Fix when cash flow is tight and a rise would strain interest cover; when you value predictability over the last basis point; or when you expect rates to climb. Stay variable when you have headroom, a short horizon, or expect falls.
Run both scenarios
Model the fixed payment and a stressed variable payment side by side. The calculator below lets you compare the monthly cost at different rates before you decide.
Where Credicorp fits
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
See fixed vs variable and reversion rate.
Frequently asked questions
Is a fixed rate always more expensive?
Usually it starts higher than the equivalent variable rate, because you are paying for certainty. Whether it ends up more expensive depends on what rates do.
What is a break cost?
A charge for exiting a fixed rate early, compensating the lender for the interest it expected. Check the terms before fixing if you might repay early.
How long should I fix for?
Match the fix to how long you need certainty and the money. A short project may not warrant a long fix; a core facility might.
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