Fixed vs. variable rate mortgage: how to choose? So now that you understand the basics of both fixed-rate and variable-rate mortgages, how do you decide which one is the right fit for you? Before you decide, it
When weighing up the pros and cons of variable vs. fixed rate loans, it’s important to know what’s going on with interest rates in the wider market. If interest rates have been falling for a while and it’s likely that they’ll increase soon, then choosing a fixed rate loan will ...
Fixed vs variable rate mortgage. Learn the difference between each type of mortgage, get to know the pros and cons first before making a final decision. When talking about mortgages there’s a lot of jargon being thrown around the place. Loan to Value (LTV), stamp duty, approval in ...
There is no right or wrong answer when it comes to choosing between fixed rate vs variable rate mortgage loans. As mentioned above, it really depends on the economy, your life goals, and your current financial circumstances. Here’s a quick summary and breakdown of the main pros and cons t...
A fixed interest rate is an unchanging rate charged on a liability, such as a loan or a mortgage. It might apply during the entire term of the loan or for just part of the term, but it remains the same throughout a set period.Mortgages can have multiple interest-rate options, including...
When a mortgage has a variable interest rate, it is more commonly referred to as anadjustable-rate mortgage(ARM). Many ARMs start with a low fixed interest rate for the first few years of the loan, only adjusting after that period has expired. Common fixed-interest-rate periods on an ARM...
If you’re worried about rising rates and prefer to know exactly what you’re paying each month, a fixed-rate mortgage is best. Fixed-rate mortgages provide certainty in knowing what you pay each month and rate hikes won’t impact you for the length of your term. ...
Similarly, if the prime rate falls, your mortgage payments will go down too, although there’s usually a specified minimum that your rate won’t fall below. Why the difference matters Both types of mortgages have benefits and drawbacks. With a fixed-rate mortgage, you have certainty about ...
When it comes to credit – whether in the form of a loan or a credit card – there’s a key term to familiarize yourself with: the annual percentage rate, or APR. There are two types of APRs, fixed and variable. Each has pros and cons. ...
Variable Rate vs. Adjustable-Rate Even in the financial sector, most people often use variable interest to refer to an adjustable-rate interest, like in anadjustable-rate mortgage. Generally speaking, an adjustable rate is a subtype of variable interest. However, they have a subtle difference, ...