The main advantage of a fixed mortgage is that you know exactly how much you are paying every single month. If you’re trying to stick to a budget, a fixed rate mortgage guarantees against your payments each month increasing precipitously. There are folks who’ve foolishly been talked into taking an adjustable rate mortgage, even though they know their budget can’t accommodate a rise in interest rate. However, if you take out a “fixed” mortgage loan, you are informed in advance as to what the precise amount of your monthly payments will be.
Another thing that you may not have considered is that with a fixed mortgage if your income increases you don’t have to pay anything extra. This means that you’ll still have a fixed rate mortgage with money left over to spend on whatever you want. Should you opt to pay down your mortgage early, however, you might find yourself subject to unexpected high fees.
Seven out of ten homeowners prefer the fixed mortgage. A fixed rate mortgage has the advantage of predictability, and that sort of security is important in these economic times. Make sure, however, that you’ve looked at every available option before you choose this type of mortgage. This will give you an idea of whether or not a fixed mortgage is right for you.
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