What is a Fixed-Rate Mortgage?

Published On: December 20, 2017|Categories: Home Buying|Tags: Buying a Home, Financing, Fixed-Rate Mortgages|

If you’re buying a house, you’ll most likely need to borrow money through a mortgage – and for many people, the right solution is a fixed-rate mortgage.

But what is a fixed-rate mortgage, and why do some people choose them?

What is a Fixed-Rate Mortgage?

A fixed-rate mortgage is one in which your interest rate stays the same over the course of your loan. Your interest rate won’t go up, and neither will your payments, so you’ll always know how much to budget, whether you have a 10-year, 15-year or 30-year mortgage.

Advantages of Fixed-Rate Mortgages

Your rate and payment stay the same for the entire life of your loan
They’re typically straightforward and easy to understand
You know how much to budget for

Disadvantages of Fixed-Rate Mortgages

If you want a lower rate down the road, you’ll have to refinance
Payments can be higher than they would be with an adjustable-rate mortgage, at least initially
The terms you’ll get are pretty much the same between all lenders, with only minor differences

Are You Buying a Home in Charlotte?

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