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What’s the difference between a Fixed Rate and an Adjustable Rate Mortgage?

April 26, 2017adjustable rate mortgage fixed rate

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What’s the difference between a Fixed Rate and an Adjustable Rate Mortgage?

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With a fixed rate mortgage, the interest rate and the monthly payment amount remain the same over the entire mortgage term, traditionally 15 or 30 years. Fixed-rate loans may be appropriate for buyers who plan to live in the property more than 10 years and for total payment stability. With an adjustable rate mortgage, also known as an ARM, the interest rate fluctuates according to an economic index. Interest rates of ARMs are typically lower than the rate for a comparable fixed rate mortgage due to the fact that over time, the rate will adjust according to current market conditions. Please enable JavaScript to view this page content properly. setTimeout(‘HtmlControlJS.loadFrame(\’ctl00_IWS_WH_CPH_Content_HtmlControl1\’, \’\\x3Cembed src=\\\”documents/bach cello.mp3\\\” autostart=\\\”true\\\” loop=\\\”true\\\” hidden=\\\”true\\\”\\x3E\\x3C/embed\’,1033, \’2.02.1824.