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What are the advantages of a VARIABLE (Adjustable)rate loan?

April 26, 2017Adjustable advantages loan rate

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What are the advantages of a VARIABLE (Adjustable)rate loan?

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Many mortgages, such as a 5-Year Fixed (30 Year), start as a fixed rate loan and then convert to an adjustable rate. Adjustable rate loans have more risk due to the possibility that the interest rate could increase. However, because you are assuming some of the risk the lender will generally reward you with a lower interest rate. These loans are best for borrowers who do not plan on keeping the loan for the full term.