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| In my opinion rates are only going to continue to climb over the next few years. If you plan on keeping the loan for the full term, the fixed rate is the only way I would do it. With the uncertainty in grain prices right now, I would prefer to have the payment established as a fixed amount and then be able to manipulate my farms balance sheet as necessary and not have an unknown liability due to the possible increase in rates on a variable loan in future years.
If you think you are going to be in a position to pay the loan off in full at the time of the 5 or 10 year reset and not have to worry about the amount of a possible increase in the interest rate, then the variable could be a good option to save a few dollars in interest in the early years of the loan.. | |
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interest rate crystal ball
