Introduction

Mortgage rates directly affect your monthly payments and long-term financial commitment. Understanding the difference between fixed and adjustable rates helps you make an informed decision.

Fixed-Rate Mortgage

A fixed-rate mortgage keeps the same interest rate throughout the loan term.

Pros:

• Predictable monthly payments

• Protection from rate increases

Cons:

• Higher initial rate compared to adjustable options

Adjustable-Rate Mortgage

An adjustable-rate mortgage starts with a lower fixed rate, then adjusts periodically based on market conditions.

Pros:

• Lower initial payments

• Potential savings if rates remain low

Cons:

• Risk of payment increases

Which Is Right for You?

If you plan to stay long-term and prefer stability, fixed rates may be ideal. If you expect to move or refinance within a few years, adjustable rates might offer savings.