💰Fixed vs. Adjustable-Rate Mortgages

Jan 12, 2025

Buying a home is a huge milestone, but choosing the right mortgage? That’s just as important. Fixed-rate and adjustable-rate mortgages (ARMs) each offer unique benefits, depending on your financial goals and plans. Let’s break it down:

Fixed-Rate Mortgages

What They Are: A consistent interest rate for the life of the loan.
Best For: Buyers planning to stay long-term and those who value stable monthly payments.
Pros:

Predictable payments make budgeting easy.
Protection against rising interest rates.

Cons:

Higher starting rates compared to ARMs.
Less flexibility if rates drop.

Adjustable-Rate Mortgages (ARMs)

What They Are: Start with a lower fixed rate, then adjust based on market trends.
Best For: Short-term homeowners or those open to fluctuating payments.
Pros:

Lower initial rates can save money upfront.
Potential to pay less if rates drop.

Cons:

Payments may increase after the fixed period.
Terms can be more complex.

How to Decide

Your Goals: Prefer stability? Go fixed. Need flexibility? An ARM might work.
Timeline: Staying long-term? Fixed is often better. Short-term? ARMs shine.
Risk Tolerance: Fixed rates are steady; ARMs depend on the market.

Need help figuring it all out? Use this mortgage calculator to make the process easier.

Your dream home is closer than you think—just make sure you have the mortgage to match!

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