Fixed Rate vs Variable Rate

When considering a mortgage, one of the key decisions you'll face is choosing between a fixed rate and a variable rate. Each option has its own advantages and considerations, and understanding the differences can help you make an informed decision.

 

Fixed Rate Mortgage:

A fixed rate mortgage offers stability and predictability. With this type of mortgage, your interest rate remains the same throughout the term of the loan, regardless of market fluctuations. Here are some key features:

1. Consistent Payments

2. Protection from Rate Increases

3. Potential Higher Initial Rate

 

Variable Rate Mortgage:

A variable rate mortgage, also known as an adjustable-rate mortgage (ARM), offers interest rates that can fluctuate over time. Here are some key features:

1. Initial Lower Rates

2. Market-Driven Adjustments

3. Rate Risk

 

Choosing Between the Two:

When deciding between a fixed rate and a variable rate mortgage, consider the following factors:

1. Risk Tolerance

2. Financial Goals

3. Market Conditions

 

Ultimately, the decision between a fixed rate and variable rate mortgage depends on your individual circumstances, risk tolerance, and financial objectives. Speak to us today so we can provide personalized guidance based on your specific situation.

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