Adjustable Rate vs. Fixed-Rate Mortgage Loans
While Adjustable Rate Mortgages (ARMs) can be attractive due to their initial low interest rate, when interest rates rise, Adjustable Rate Mortgage payments also rise. By converting to a Fixed-Rate Mortgage, you can protect yourself from the uncertainty of increasing interest rates and fluctuating payments.
Fixed Rate Mortgages maintain the same interest rate for the life of the home loan, whereas the interest rate on an Adjustable Rate Mortgage can rise or fall based on market rate fluctuations. When the fixed period ends, your monthly mortgage payment may rise to a higher rate.
Why Refinance to a Fixed Rate Mortgage?
Refinancing Your ARM to a Fixed Rate Mortgage Is a Good Choice If You:
- Believe interest rates may rise, and you want to lock in a great low mortgage rate for the duration of your loan
- Are retired, on a fixed income, or otherwise wish to have the stability of predictable payments
- Plan on owning your home for many years to come