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Lock in Low Rates

Generally speaking, fixed interest rates are calculated as averages of expected future rates. You want to be on the right side of that trajectory. In general, fixed interest rates are calculated as averages of expected future rates. You want to be on the right side of that trajectory.

One consideration is an interest rate derivative, or swap, wherein you hedge your rate exposure by swapping a variable rate for a fixed rate, equating to a predetermined cost for the life of the loan. You can choose to lock in the rate for all or a portion of your financing, giving you an opportunity to keep your overall cost down while variable rates remain favorable, but still adding certainty to some of your long-term expense. Of course, actual rate movement is influenced by a number of complex factors.

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