Fixed Versus Variable Mortgage
Fixed or Variable
With the prospect of upcoming rate hikes looming over, many home buyers think that locking into the best fixed rate mortgage is the way to go. Does the idea of a mortgage with a fixed interest rate sound appealing?
There are mixed messages out there about when and if interest rates are going to go up. But just as important is a thorough understanding of fixed-rate mortgages and what it could mean for you and your home investment in the long run. Keep in mind that the cost of interest rates rising by 1% is equivalent to the home price falling by 10%. Historically when interest rates have gone up they have gone up fast. It is not uncommon for there to be a 1% hike in a matter of months.
Here are some common fixed-rate questions you may be asking yourself.
does a Fixed Rate mean?
are Fixed Rate Loans better?
A fixed-rate loan means you will always know how much your home payment will be each month, regardless of what is happening with the economy or current interest rates.
is the downside of Fixed Rate Loans?
Over the life of your fixed-rate loan, you will pay a substantial amount of interest. In fact, you will probably pay hundreds of thousands of dollars in interest. There are ways to manage your mortgage so that it is an investment that works for you, and you can do this by talking to a mortgage specialist.
you have a Fixed Rate Mortgage?
You think interest rates are low
The best fixed rate mortgage works for you and your lifestyle. If you'd like the peace of mind that comes with a stable interest-rate payment, then a fixed-rate mortgage may be the ideal choice. Borrowers often choose fixed-rate mortgages when interest rates are low and are expected to rise.