Most people will have heard a little about fixed-rate mortgages in the past. That is because they are the most popular type of home loan in the entire US. However, there is some confusion about whether or not they offer the best deal. With that in mind, we’ve listed some of the pros and cons in the hope of setting the record straight. If you’re looking to purchase a property in 2015, it’s vital that you perform a lot of research into all the lending options available before making your decision. Nobody wants to find themselves in financial trouble in the near future because they didn’t do the groundwork.
The pros of fixed-rate mortgages
If interest rates should rise, people with fixed-rate mortgages will not see any difference in their monthly payments. That is because they keep the same rate from the day they sign the contract until it has expired.
Most fixed-rate mortgage solutions allow you to keep the same rate for at least five years. That will help to give you some breathing space, and it will make it easier to compile your budget.
The cons of fixed-rate mortgages
If interest rates drop for any reason, homeowners with fixed-rate mortgages won’t take advantage. Their rates will stay the same for a pre-arranged time regardless of what might happen to the economy.
As you can see, there are too good elements and one bad. We hope that has helped you to better understand whether or not fixed-rate mortgages are right for you. To learn more, take a look at the infographic.