Fixed Rate vs. Adjustable Rate: Which is Right for You?
The main difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)is the consistency of your monthly payment.
- Fixed Rate: Your interest rate stays the same throughout the life of the loan, offering predictability and stability, making it ideal for long-term homeownership and budgeting.
- Adjustable Rate: The interest rate is lower for the first 3-5 years but may adjust annually based on the 1-year US Treasury market. Rate changes are capped at 2% per year, with both a minimum and maximum rate over the life of the loan. ARMs are great for short-term homeownership, large early payments, or those looking to save in the initial years of their loan.
To determine which option fits your needs, use our mortgage calculator here.
Mortgage Discounts:
You may qualify for additional benefits or discounts. Check out our Special Offers here to see if you can save more on your home loan.
Loan Term:
The loan term refers to how long you’ll make payments. Typical terms are 15, 20, or 30 years:
- Shorter Term: Higher monthly payments but less interest paid over time.
- Longer Term: Lower monthly payments but more interest paid overall, offering more flexibility in your budget.
Curious how changing your term, rate, or monthly payment will affect your mortgage costs? Start here.
