Fixed vs Adjustable Rate Mortgage
A fixed-rate mortgage keeps the same interest rate for the life of the loan, which makes it easier to plan around a stable principal and interest payment.
An adjustable-rate mortgage may begin with a lower rate, then adjust after an introductory period. That can be useful for some short-term homeowners, but it adds future payment risk.
The right structure depends on how long you expect to keep the home, your tolerance for payment changes, and the size of the savings during the introductory period.
Key takeaways
- Use calculators to compare scenarios, not to replace lender disclosures or professional advice.
- Small changes in rate, fees, and term can create large lifetime cost differences.
- Look at both monthly affordability and total cost before making a decision.