Pink Champagne

There are some fixed mortgages that only offer a fixed rate for up to 12 months. These are typically offers designed to attract new customers who would otherwise have difficulty qualifying for a mortgage. You could sign up for an introductory rate of interest that won’t be in effect very long into the loan. When the fixed interest rate has run its course, the rate goes on to fluctuate in correspondence with the housing market. The unfortunate reality is that this is rarely something to be desired. The major drawback of a fixed mortgage is that when the property value falls due to market trends, it will not be profitable for you. Those with an adjustable rate mortgage will pay eitherhigher and lower rates depending upon the housing market.

The best part of a fixed mortgage is that your monthly installment is decided in advance. This is wonderful for those who would encounter issues with an increase in their monthly payment, like not being able to stick to their budget. 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. At least with a fixed mortgage you know exactly how much you need to pay every single month.

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. You can try to pay off the mortgage loan earlier than the prescribed time, but you’ll often find that that will incur some high fees.