The Difference Between A Variable Rate Mortgage And A Fixed Rate Mortgage

Deciding which type of mortgage you're willing to commit to can be a difficult decision

. Everywhere you turn there are companies directing you to decide between a variable rate and a fixed rate, but very few companies will actually take the time to show you what that means to your monthly budget, and to the reduction of your mortgage's principal.

A good Mortgage Broker is not only interested in selling and setting-up your mortgage financing, but is truly dedicated to helping you to learn the difference between a variable rate, and a fixed rate mortgage. They will gladly sit down with you, and show you in practical ways what a variable rate and a fixed rate mortgage will each mean to your family's budget. By helping you to carefully weigh out the pros and cons of both a variable and a fixed rate mortgage, the mortgage broker will assist you in making a careful and well thought-out decision.

When comparing a variable rate and a fixed rate mortgage there are a couple of important factors to consider. First of all, if your household operates best on a budget, a fixed rate mortgage may be the best answer for you. By choosing this type of mortgage, you will always know what your monthly payment is for each month of your term. If you have a 5 year fixed mortgage, this means that for 5 years your payment will never change. This can be a great benefit if you enter the market at a time when interest rates are lower than average, since your fixed mortgage protects you from rising interest rates. Conversely the same is also true. If you enter the market when interest rates are higher than normal, you will be locked into that fixed rate even if interest rates fall. For some people considering a fixed rate mortgage, the risk of paying slightly higher than average interest rates is worth being able to budget for their mortgage payments each month.

Comparing a variable rate and a fixed rate mortgage also means educating yourself on the benefits of a variable rate mortgage. A variable rate, as opposed to a fixed rate mortgage fluctuates with changing interest rates. With a variable mortgage, your monthly mortgage rates will follow bank prime interest rates, and this can mean higher payments some months and lower payments others. For those who aren't so concerned with budgeting monthly, this may be a great option and can have significant saving but with the risk of costing more.

A good Mortgage Broker will gladly sit down with you to help you understand whether a variable rate or a fixed rate mortgage is best for you and your family. Be sure to visit a great mortgage broker today to discuss the best rates and best mortgage products are right for you.

Paul Mangion

by: Paul Mangion

POST COMMENT

Mortgage Lenders Continue to Stall Foreclosure Activities Mortgage requirements Faxless payday from loan direct lenders Faxless payday loan with instant approval Faxless payday loans for limited income Faxless payday loans long term repayment Faxless Payday Loans in Stroudsburg, Pennsylvania Faxless payday loans through Western Union The Banking System Find Out All You Need To Know With French Mortgage Advice Faxless Payday Loans: Systematic access to easy funds Benefits Of Personal Banking In Minnesota Payday Loans No Faxes-Avail easy funds to cover up dire needs