What Are the Advantages of a Fixed-Rate Mortgage?
In a fixed-rate mortgage, the borrower will be protected from sudden increases in interest rates. A fixed-rate mortgage is therefore much more stable than an adjustable-rate mortgage. In addition, borrowers can make advance arrangements for repayment as well as for other uses for their funds, because they will always know exactly how much the monthly payment will be.
The borrower will have more emotional security during a fixed-rate mortgage. In an adjustable-rate mortgage, future payment amounts are uncertain, which can lead to increased stress for borrowers.
It's easier to shop around for the best terms and costs in the context of fixed-rate mortgages. Determining the best mortgage for you will often include comparing the interest rates and closing costs between different loans. If you are looking at adjustable-rate mortgages, you need to take other factors into consideration—some of which may not be predictable ahead of time—to determine total cost. These factors include not only the introductory interest rate and closing costs, but also the length of the introductory period (after which rates will begin to shift), and the possible fluctuations of the interest rate.
- How Are Interest Rates Calculated?
- What Interest Rate Predictions Do Economists Have for the Upcoming Years?
- What Is the Difference Between Mortgage Interest Rates and APRs?
- How Long Is My Mortgage Rate Good For?
- What Is the Difference Between Fixed-Rate and Adjustable-Rate Mortgages?
- What Are the Disadvantages of a Fixed-Rate Mortgage?
- What Are the Advantages and Disadvantages of an Adjustable-Rate Mortgage?
- Which Banks Give You the Best Mortgage Rates?
- What Are the Interest Rate Trends for 2019?