A fixed rate mortgage is exactly that it is a fixed rate for an agreed term. The term of the fixed rate is your choice and varies from lender to lender.
Of the thousands of different mortgage products available the fixed rate mortgage could be the one for you so let’s establish a few facts before you make any decisions.
Fact number one is that the fixed rate mortgage could provide you with security that you are able to pay your monthly mortgage payment.
There are many factors to consider when taking out a mortgage and risk of rising interest rates in the future should definitely be on your list of considerations.
We all know that facts and opinions are different. You need to know the facts about a fixed rate mortgage to form your own opinion if it is good or bad.
It’s a fact that crystal balls don’t work so I figure the next best thing is to know what your mortgage payments are going to be every month. That is where the fixed rate mortgage comes into its own.
As your mortgage payment is in many cases the biggest household outgoing isn’t it a comforting thought that you know what you need to pay each month?
What price is peace of mind worth? When interest rates go up it will not affect your monthly payments during the fixed term with a fixed rate mortgage.
When given an option whether to gamble with your mortgage payments take the best option for you.
Some people like to gamble and live on the edge but to gamble whether or not you will be able to afford your mortgage payments due to a hike in interest rates!
If interest rates go down you could lose out on a reduction in your monthly mortgage payments (providing your lender passes on the interest rate cut). If it goes up you could have your home repossessed.
Which is worst? Losing out on possible lower monthly mortgage payments if interest rates are reduced or losing your home if the interest rates are increased.
Decisions, decisions! One decision you should think carefully on is whether or not a fixed rate mortgage is for you. Remember the major benefit is constant mortgage payments for the fixed term.
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