What is it?
A fixed-rate mortgage has the same interest rate for the life of the loan.
Advantages of a fixed-rate mortgage
- If interest rates increase, your mortgage won't be affected.
- You'll know what to expect from your mortgage payment, making budgeting and planning easier.
Disadvantages of a fixed-rate mortgage
- If interest rates drop throughout the term of your mortgage you won't benefit unless you refinance.
- They can be more expensive than an adjustable rate mortgage (ARM)
Is it right for you?
Fixed-rate mortgages are a good option for people who:
- are buying their first home
- can't commit to watching the markets to judge the impact on their ARM
- are looking for stability in their mortgage payments