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When you're buying a home, one of the biggest affordability factors is your mortgage rate
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and it usually comes down to a fixed rate or an adjustable one. A fixed rate mortgage is just that, fixed for the life of the loan
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Your rate and monthly payment are the same every month, no surprises
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That makes for peace of mind, especially when interest rates are unpredictable. An adjustable rate mortgage works differently
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It often starts with a lower rate, which can make your mortgage payment more affordable
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but only for a certain amount of time. It could be anywhere between two to five years or more
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After that, the rate changes based on the market. If the market rates increased, your rate will increase
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If they lowered, your rate could be lower. So you'd have to be okay with a possible hike in your mortgage payment
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The mortgage that makes sense for you depends on your future plans and how comfortable you are with risk
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If you're planning to stay in your home long term and want stability, a fixed rate may be the better fit
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If you expect to move sooner and can handle potential changes, an adjustable rate could work
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Knowing your options will help you choose with confidence
