A fixed rate mortgage offers the same interest rate for the entire length of your loan. The benefit of a fixed rate mortgage is that you can predict exactly what your monthly mortgage payments will be – a great advantage for financial planning purposes.
Fixed rate mortgages are often compared to variable rate mortgages, which feature fluctuating interest rates. Variable rate mortgages typically offer a low introductory interest rate – lower than the rates for a fixed rate mortgage. This can seem like a really good deal upfront, but it’s possible for the interest rate to rise over the life of your loan, meaning you could end up paying much larger monthly mortgage payments. Before selecting either a fixed or variable rate mortgage, it’s important to weigh the pros and cons of each option to determine what’s right for you and your financial situation.
