Financial Advice
What’s The Difference Between A
Fixed Rate And Variable Rate Mortgage?
Mortgages can be awfully confusing. But, we hope that the following will help you make sense of it all.
Fixed Rate Mortgage
With a fixed rate mortgage, the interest and principle payment stay the same over the life of the loan.
Fixed rate mortgages give a fixed payment schedule, which may appeal to those who are on a set income and those who want a fixed payment schedule.
Variable Rate MortgageThe interest rate can change periodically with a variable rate mortgage. The changes are tied into the market rates that exist at the time the rate is subject to change. They can have lower interest rates, but can increase if interest rates climb. There is a predetermined ceiling, which says how high the interest rate can adjust.
Adjustable rate mortgages are beneficial for those who plan to move soon, for those who don’t qualify for higher fixed interest rates and those who don’t mind fluctuating payments.
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