What’s the difference between a fixed-rate and an adjustable-rate mortgage?
With a fixed-rate mortgage, the interest rate and the monthly mortgage payment stay the same, so you’ll always know exactly what your rate is and what you’ll pay each month. With an adjustable-rate mortgage, your rate varies based on an index rate. If rates go down you pay less, and if rates go up you pay more. Adjustable-rate mortgages usually have lower initial interest rates than fixed-rate mortgages, but fixed rate mortgages offer the security of knowing your payments will never increase.
