Fixed Rate Mortgage
With a fixed-rate mortgage, the interest rate and principal/interest payment remain the same throughout the loan’s duration, providing you with a predictable monthly payment. However, property tax and insurance rates may cause your monthly payment to fluctuate slightly.
If you plan to stay in your current home for the long term, a fixed-rate mortgage may be the better option for you. Knowing exactly how much you’ll pay each month can help you budget and plan accordingly.
On the other hand, if interest rates in your area are high, it may be best to avoid a fixed-rate mortgage. Once you’ve locked in your interest rate, you’ll be stuck with it for the duration of the mortgage, unless you choose to refinance. If rates are high when you lock in, you could end up overpaying thousands of dollars in interest. Be sure to consult with a local real estate agent or a Home Loan Expert to get a better idea of how market interest rates are trending.