The Benefits of Fixed-Rate Mortgages
Josh Neimark
If you're in the market for a mortgage, you may be considering an adjustable-rate mortgage (ARM). While ARMs can be a good option for some borrowers, there are several reasons why a fixed-rate mortgage may be a wiser choice for you.
Stable Payments
With a fixed-rate mortgage, your monthly payment will stay the same throughout the life of the loan. This can make it easier to budget for your mortgage payment, as you won't have to worry about your payment increasing unexpectedly.
Protection Against Interest Rate Increases
When you take out an ARM, your interest rate can adjust up or down based on market conditions. This means that your monthly payment could increase significantly if interest rates rise. With a fixed-rate mortgage, you'll be protected against interest rate increases, giving you peace of mind and financial security.
Better for Long-Term Planning
Because your monthly payment won't change with a fixed-rate mortgage, you can better plan for the future. This can be particularly important if you're on a fixed income or have a tight budget.
Higher Certainty
In a fixed-rate mortgage, you will have higher certainty that your mortgage payment will remain constant. This is particularly important if you're planning to stay in your home for a long time.
Why Fixed-Rate Mortgages are Smart Right Now
With interest rates still near historic lows, now may be a particularly good time to lock in a fixed-rate mortgage. While interest rates may rise in the future, you can protect yourself from those increases by locking in a low rate now.
In addition, because fixed-rate mortgages are generally considered less risky than ARMs, they tend to have lower interest rates overall. This means that you may be able to secure a lower monthly payment with a fixed-rate mortgage than with an ARM.
Conclusion
While adjustable-rate mortgages can be a good option for some borrowers, a fixed-rate mortgage may be the smarter choice for you. With stable payments, protection against interest rate increases, better long-term planning, and higher certainty, fixed-rate mortgages offer a number of benefits that ARMs simply can't match.
If you're considering a mortgage, it's worth taking a close look at fixed-rate options. With interest rates still low, now may be the perfect time to lock in a low rate and secure your financial future.
