As the interest rate kept declining, the floating rate adjusted each year to the lower market rate, but fixed-rate loans were locked in at these sky-high rates. As a result, you could've saved about S$12,675 or 6% of total interest cost if you took out a floating rate loan of S$400,000 in 2007, compared to its fixed-rate counterpart. The advantage of floating-rate bonds, compared to traditional bonds, is that interest rate risk is largely removed from the equation. While an owner of a fixed-rate bond can suffer if prevailing interest rates rise, floating rate notes will pay higher yields if prevailing rates go up. After all, mortgage rates continue to reach record lows seemingly every week, so why not wait it out a little longer if you’ve got time? Instead of locking in a rate of 3.75% on a 30-year fixed, you might be able to take advantage of all the economic turmoil going on and wait for your rate to fall to 3.5%.