First off, let me explain what exactly is the difference between fixed rate mortgages and variable rate mortgages. Basically, fixed rate mortgages always remain at the same rate for the entire life of the loan. This is great for people who want stability with their money. However, this also makes it hard to budget. If you ever need to make a major life change such as buying a house or buying a car then you may find that your fixed rate mortgage loan can’t meet these needs.
On the other hand, variable rate mortgages fluctuate up and down along with the base interest rate. You can use this feature to your advantage. For example, if you know in the future the interest rate will be lower than it is now then you can lock in your rate at that point and not have to pay any additional interest. This is great if you know that in the future there will be an interest rate increase and you don’t need to do anything to protect yourself. On the other hand, if you know the current interest rate will be higher than the rate you wish to have then this can be a good way to protect your monthly payment while you can still afford to make other arrangements such as putting down a down payment.
{T fixed rate vs variable rate mortgages Which one is better for you? As you can see there are pros and cons to each type of mortgage. Fixed rate mortgages have advantages such as providing security and stability but there are disadvantages too. To learn more about choosing the right mortgage for your needs go to the links below. There is also plenty of free information available if you visit the site below.
{T fixed rate vs variable rate mortgages Which one is better for you? In the end it comes down to what your situation is. The type of mortgage you choose should be based on what you wish to get out of it. If you need stability and security and can afford a low initial payment but you may have to sell in the future, then a fixed rate mortgage might be the way to go.
