The MoneyPark mortgage advice offers you a comprehensive mortgage comparison that helps you identify which mortgage best suits your needs and offers you the highest savings. It is advantageous to know some mortgage terminology and the differences between different mortgage models when defining your optimal mortgage strategy. Our mortgage advice helps you understand the different mortgage models which are called fixed-rate mortgage,LIBOR mortgage and variable-rate mortgage. Fixed-rate mortgages usually have a term of one to ten years and the interest rate is fixed for the duration of the mortgage. Due to the fixed interest rate, the mortgage borrower won’t benefit from falling interest rates, but more importantly, won’t suffer a disadvantage from increased interest rates. In addition, the fixed interest rate provides a high level of budget security for several years. Our mortgage advice considers all of your personal requirements when looking for the optimal mortgage model. The LIBOR mortgage consists of a fixed margin of the bank and the LIBOR interest rate (the rate at which banks lend money to each other in the short term). Since both the margin of the bank and the LIBOR rate are known to the mortgage borrower, the LIBOR mortgage is a very transparent mortgage model. In contrast to a fixed-rate mortgage, the mortgage rates are not fixed, which is why the mortgage borrower can benefit but also suffer a disadvantage from changing market interest rates. Protection against a strong increase of the market interest rate provides a fee-based interest rate ceiling, also known as «cap». Variable-rate mortgages often do not have a fixed term and usually have a cancellation period of three to six months, which is why the variable-rate mortgage is the most flexible of mortgage models. But this flexibility has its price: a variable-rate mortgage is usually the most expensive financing option. For variable-rate mortgages, the bank adjusts the interest rate of the mortgage in line with the interest rate levels on the capital markets. With the MoneyPark mortgage comparison you can check the current mortgage rate development on the mortgage rate history page. However, the process of adjusting the rates isn’t subject to regulated guidelines, which is why the variable-rate mortgage is not considered a transparent mortgage model. Someone looking for a mortgage should also know the expressions loan-to-value ratio and affordability. Loan-to-value ratio is the ratio between the amount of the mortgage and the property value. The ratio between the mortgage borrower’s gross income and the expenditure for the property is called affordability. Use our mortgage calculator to calculate your personal loan-to-value ration and to check if you can afford the respective property. You can find more detailed MoneyPark information about mortgages and our mortgage comparison in the Information – Mortgages section.