What Are the Disadvantages of a Fixed-Rate Mortgage?
If the market interest rate drops significantly, the borrower in a fixed-rate mortgage will have to continue paying a fixed rate that is higher than the market rate.
It is generally more difficult to obtain a fixed-rate loan from lenders due to the higher initial payments required.
Furthermore, lenders will generally prefer to work with borrowers who have good credit when offering fixed-rate mortgages.
A fixed-rate mortgage is more suitable for conservative borrowers since it's protected from sudden jumps in interest rates.
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- What Is the Difference Between Fixed-Rate and Adjustable-Rate Mortgages?
- What Are the Advantages of a Fixed-Rate Mortgage?
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