You found the perfect home, now it’s time to find the perfect loan! There is a wide range of personal factors and market changes that you’ll need to consider when choosing the right mortgage for you. Here we’ll break down the differences between an adjustable-rate mortgage and a fixed-rate mortgage to help you determine which may be your best match!
Fixed-Rate Mortgage
A fixed-rate mortgage charges a set rate of interest throughout the life of the loan. This is a great option for those who are looking for a simple, straightforward mortgage solution.
Pros:
- Consistent monthly mortgage payments throughout the life of the loan.
- Protected from sudden interest rate spikes.
- Predictable monthly payments will make budgeting easier.
Adjustable-Rate Mortgage
Adjustable-rate mortgages often offer a period where the initial interest rate remains constant, after which the rate adjusts depending on the market. If you plan to sell your home before the initial fixed period ends, an adjustable-rate mortgage is a great option to save some cash.
Pros:
- Lower introductory interest rates may help you qualify for more home.
- You won’t need to refinance to take advantage of decreasing rates.
- Save more cash each month to put toward other financial goals.
Still not sure what’s right for you? Take our Mortgage Matchmaker quiz!
Understanding your rate options is just one of the many factors to consider when determining the right mortgage solution for you. If you need more assistance identifying your goals and how to reach them, let one of our Loan Consultants guide you!
