Fixed Rate vs. Adjustable Rate Mortgages

Published On: January 3rd, 2018|Categories: Blog, Buying, Financial Preparation, Financing, Mortgages|

If you’re buying a home, you’ll have plenty of options when it comes to financing – and one of them will include choosing between a fixed rate and an adjustable rate mortgage.

What is a Fixed Rate Mortgage?

A fixed rate mortgage is one in which your interest rate remains the same over the lifetime of your loan. Your payments will never change, no matter what new buyers are facing on the market, unless you refinance.

What is an Adjustable Rate Mortgage?

An adjustable rate mortgage is one in which your interest rate fluctuates each year, usually on or near the same date. Your payments can go up or down, but that’s only after an initial fixed rate period (which is usually between 5 and 10 years).
Which One is Right for You?
You should talk to your lender about your choices and see which type of loan is best for your financial circumstances. You have the right to compare loan terms and packages, as well, so call as many lenders as you’d like to find one that’s willing to give you the most competitive rates possible.

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