What’s better a “fixed” rate or an “adjustable” rate?
There are situations where it makes sense to go with a “fixed rate” and times when an “adjustable rate” is the more sensible option. So what are the pros & cons? Let’s take a look…
Fixed-Rate Mortgages are great for when mortgage interest rates are very low.
It makes more sense financially to lock in one rate for the life of your loan when you know that the rate is going to be quite low. (More about “Rate Locks” in a little bit)
Locking in a fixed-rate mortgage is a great option for those looking to stay in a home for a longer period of time.
The adjustable-rate mortgage is better suited for borrowers who don’t plan on living in the home for a long time.
An adjustable-rate can also work in the borrower’s favor if rates are predicted to drop even further in the future.
To compare different loan option benefits, we’ve created a chart of the 4 common benefits of each loan in an easy to understand loan options comparison chart.