Fixed vs. Variable Rate Mortgage – What Is The Right Answer For You?

You need to know the pros and cons of fixed vs. variable mortgage rates because this will help you decide which type of mortgage is the best answer for you.

Both of these types of mortgages have their advantages and their disadvantages. The best way to learn about all of the advantages and disadvantages is to do your homework.

Mortgage brokers can help you make the best decision possible because they have all the knowledge and information needed to help you make the smart choice for you. Trying to make the decision on your own can be done but talking to a professional will help you make the most informed decision.

Advantages of fixed rate mortgages:

1. When you get a fixed rate mortgage you will have security knowing what your payments will be each month until the end of the fixed period. This is a big advantage for a lot of people because it gives you the chance to plan your financial future easier.

2. If interest rates were to increase then you will be safe because your payments will not increase since you are at a fixed rate for a certain period of time.

Disadvantages of fixed rate mortgages:

1. If interest rates should decrease you can’t take advantage of this because you are on a fixed rate for a certain amount of time.

2. You will have to pay a higher interest rate than the SVR or standard variable rate in order to get the fixed rate you want.

Advantages of variable rate mortgages:

1. When you have a variable rate loan it will follow the base interest rates. If the rates are low then this is a big advantage for you because depending on the lender you have, it can make your base rates fall and this will help to reduce your monthly payments.

Disadvantages of variable rate mortgages:

1. Since your rates follow the base rates if they should rise then this means that your rates will also rise and in turn your monthly payments will also be higher.

Now that you have this important information about mortgage interest rates you will have a much easier time making your decision. Just make sure you take your time and do your homework and be smart by talking to a mortgage professional.

For more information visit www.gtamortgagematters.com.