Benefits Of A Fixed Rate Mortgage
Posted on May 24, 2009 in the Mortgages category
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We’ll have a look at what benefits there are to a fixed rate mortgage for you. We’ll then look at using a mortgage overpayment calculator. With the fixed rate mortgage comes security. With the mortgage overpayment calculator comes potential savings.
Fixed rate mortgages are one of a few different types of mortgage available. You get your interest rate locked for the period of the deal, usually a few years. Your interest rate, and therefore your payments are fixed.
Do fixed rate mortgages have any plus points? Because your payments stay the same you don’t get ups and downs in your monthly payments. You get to budget easier every month as your payments remain the same.
Your payment is locked so it really doesn’t matter what the general rates are doing. In the last few decades we have seen interest rates almost double in a few short months. If the rates rose drastically over a short term those on variable mortgages could struggle to meet payments.
There can be certain circumstances when a fixed rate mortgage may not be right for you. The arrival of a new child could mean you need a bigger home and need to move. These are reasons to avoid fixed rate mortgages. In situations like these you may need to redeem the mortgage and pay a hefty redemption penalty on the fixed rate mortgage.
A redemption penalty is a charge that almost always comes with a fixed rate deal. You can get hit with a nasty charge when you are least expecting it. You must think twice before agreeing to a fixed rate deal if a charge like this will badly affect you.
It’s worth thinking about paying a bit extra each month in addition to whatever you normally pay. You may have a fixed rate but it doesn’t mean your payments have to be fixed if you can afford extra. You lender will prefer you make the minimum payment and will never tell you it’s possible to pay extra.
What are the up sides to paying extra each and every month? You can shave several years off your mortgage term by paying slightly more each month. You can save a shedload of cash as well as knock a few years off.
How do you use a mortgage overpayment calculator? You enter your mortgage details. The amount borrowed, the length, the interest rate etc. You can then play around by changing the figure you can afford to overpay.
You get to see what sort of length in years you can knock off. It also tells you what sort of financial saving you can expect to make. If you play around with the overpayment figure you can see that the more you overpay the more you save, in cash and years.
There are astonishing amounts of savings to be had. If you borrowed a hundred thousand at five percent over twenty five years. If you pay an extra fifty each month, you can shave more than 3 years off the length and save 12,000 in interest payments.
That example is paying just 50 extra every month. What if you could afford 100 a month to overpay? Using the same figures in the mortgage but substituting 100 extra for the previous 50 extra. You can knock a staggering 6 years or more off the length and save yourself in the region of 20 thousand.
An extra benefit is the years you save are free from any payment whatsoever. Being free of your mortgage chains a few years early is a definite reality if you can pay extra now. Of course your lender will never tell you this, you have to discover this on your own.
If we revisit the example where we knocked more than six years off the mortgage. This shortening of the mortgage by six years saves you another 40,000 or more. This is 40 grand in your pocket and not your lenders. Overpaying is difficult, make no mistake, but the rewards can be amazing.
There you have a few benefits of going for a fixed rate mortgage. Not only do you get set monthly payments, you get to sleep easy at night because of it. We also looked into the future and saw some big savings if you can make a little overpayment now.
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208 Responses to “Benefits Of A Fixed Rate Mortgage”
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Very good this post!Useful information for everybody, especially in this crisis!Congratulations fot your blog!
To me, having a variable rate mortage is like playing the slots with your mortgage. You never know what you’ll have to pay next, and most of the time you lose.
Thanks for taking the time to post this, great information!
Of course fixed mortgages are the best, however those who have to settle for adjustable are usually the ones who are having trouble landing a fixed loan.
Thus…the problem.
Fixed rate mortgages can be a really good thing because they protect you from increases in the interest rate. However, in a period where the interest rate would have fallen with a variable rate, you would lose out. Also, like you had mentioned, a lot of savings can occur from overpayment so it’s definitely a good idea if feasible for your budget.
Calculating mortgage is really a tough situation… When you have fixed rates, the security is the best gain!
Over here in the UK people with fixed rates feel like they are getting a raw deal because the base rate is at 0.5%. I say wait until the Bank of England raises the rate to get back the money its spent! you will have a remarkably great deal.
Great article.
many have learned their lesson about adjustable rate mortgages and will stay away. But what is interesting is that rates on a 5 year ARM have been a lot lower than the 30 year fixed lately. Does this mean that banks believe they will be able to get their money back in 5 years? Are they expecting that the property will have equity to do a refinance or sale, or have they not learned their lesson yet?
I think fixed rate mortgage deal are fair in case the amount is low & will not vary even after twice or thrice years of period.
Fixed rate mortgages gives you security. It also does not offer any flexibility, and as you quite rightly said, will give you early payment charges should you decide to change your mortgage lender.
Thanks…
Thanks for the article.
Of course overpayments are not restricted just to Fixed Rate mortgages, but that’s by the by.
Here’s how I like to look at the difference between fixed- and variable-rate mortgages: fixed rate lets you know where you are at all times, and is suited to the more risk averse amongst us.
Variable rates can rise and fall with the markets — and your payments go with them — so may work well in some climates. These are for the more risky among us.
Great Advice .This will benefit all my business for sure.
thanks for your article.. this might be good to apply whne buying a new house
Thx for articles my bro.^^
Too many people were burned by adjustable rate mortgages recently. But a fixed rate is not always necessarily the best loan, If you are planning on moving or selling in a short time period. But keep in mind you need appreciation to refinance and that may take at least 10 years.
Wow thanks! You just saved me a lot of money! I might come back and ask you more questions.
You have it exactly right. But you forgot to mention tha a 30 year fixed rate mortgage at historically low rates is the ultimate hedge against the possibility of inflation or even hyperinflation. Given the Bush and Obama administrations’ unprecedented increase in the money supply, I’m betting on inflation to increase.
By the way, a long-term fixed rate is another reason why I prefer 1-4 unit investment properties over commercial properties. You just can’t get a fully-amortizing 30 year fixed rate with a commercial loan. What will you do if the interest rates spike up?
Finally, the idea of making extra payments is not bad — and is certainly better than signing up for a 15 year loan. Many people forget that they can always shorten their loan term by making extra payments — but they can only lengthen the term if the lender agrees. If they’ve lost their job in the meantime, they can forget about it.
Fixed rate mortgages sounds like the best plan if you want consistency.
I have an ARM mortgage and I just hit 5 years so it reset. Now I don’t have the interest only or 30 years payment options. I’m not sure if it’s still an ARM or if I lucked out and it became fixed right when the rates were the lowest. How does Bank of America handle ARMs at the reset point?
Thanks for very useful info on fixed rate mortage.
Hi,
Very nice post.I got some useful information here.
Thanks for the sharing.
The same payment each month is very good. You can plan your income and expenses for each month and live quietly.
Thank you for info. Very interesting and usefull.
Fixed rate mortgages are the most classic form of loan for home and product purchasing in the United States. The most common terms are 15-year and 30-year mortgages, but shorter terms are available, and 40-year and 50-year mortgages are now available (common in areas with high priced housing, where even a 30-year term leaves the mortgage amount out of reach of the average family).
Outside the United States, fixed-rate mortgages are less popular, and in some countries, true fixed-rate mortgages are not available except for shorter-term loans. For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years. In Australia banks are unable to offer fixed rates for terms longer than 15 years due to funding constraints and market collusion at the big end of town.
Good post! I always tend to recommend fixed-rate mortgages due to their stability and long term low cost.
Good post! Getting a fixed rate mortgage is a bit of a gamble however, as you never know if the market is going to rise or fall. But with market savvy, you can make a much better guess.
I have had plenty of clients regret their decision to go with an ARM in the past, and obviously we’re seeing the negative effects of ARMs all over the place.
Great post!
Fixed rate mortgage, I need it. And I think every people also need it…….
I couldn’t more about about the security if fixed rate mortgages. I also believe Helocs offer excellent insurance policies against financial situations where there may be a need for immediate cash. If a homeowner has a heloc in place that access is fairly simple.
Thanks for the article.
Can anyone tell me why it is that USA now has 1 in 12 home owners behind in their mortgage payments while in Canada it is just 1 in 200? Something is terribly wrong with the American mortgage system. How is it that other countries do not appear to have the same problems? What is so different in USA?
good info keep it up!
Good information. I think fixed is safer and easier in planning.
Not all mortgage calculators are the same; for instance our website’s calculator lets you select the New Jersey County where the home you’re interested in buying is located as home prices can vary greatly and in fact can be as much as 65% higher in the neighboring county.
it’s a helpfull info for me…i’ll try to do what you said friend
I find the mortgage calculators to be very useful tools. People are really shocked when you punch in the numbers and let them see the difference that paying a little extra can make. Thanks for the post!
thx for sharing…. i need this
In France, fixed rate is the most used mortgage. It’s a sort of tradition and whith the last financial crisis, fixed rate became an obligation !
Is there a benefit of locking into a fixed rate mortgage right now with the interest rates so low?
The benefits of a short-term adjustable rate mortgage are generally outweighed by the risks. The market downturn over the past few years proved that part to the part of heartache for many borrowers. The lower interest rates of ARM loans attracted many borrowers who believed that they would always be able to refinance into fixed rate loans if need be. When property values dropped they learned the hard way that this is not always the case. In the absense of refinancing options, when payments jump, foreclosure looms.
Thanks for your post.
Thanks for explaining the benefits of a fixed rate mortgage, very helpful, in a subject that can and is often a complete minefield! Am gonna head over and use your overpayment calculator, and will probably wish I hadn’t! LOL
Good article. Gone are the days of the 5 year fixed interest only with the hopes to refinance ina few years into a 30 year and get cash out with your appreciation. Ahh the good ol days.. But if looking at a 30 year fixed now I would defnitely hurry up and jump on..appears rates are going to rise and we will be back in the 6-7% range and start killing affordability.
Thanks for this post. Through this post i got more knowledge about Mortgage.
Especially at today’s rates, I think fixed rate is the way to go. Plus, with a FR loan, at least you know what you’re getting.
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n extra benefit is the years you save are free from any payment whatsoever. Being free of your mortgage chains a few years early is a definite reality if you can pay extra now. Of course your lender will never tell you this, you have to discover this on your own.
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What a really great post!
My mortgage is up for renewal soon and this has helped me become a little bit more knoewledgeable about the whole process!
Thanks
Great post!
Thanks for sharing! I will keep it!
Fixed rates are so low right now, it makes sense for many to take this option. Yes, you can save some short term $$ by going with an ARM or taking an I/O payment, but if your intention is to keep the house as your primary residence, a FRM is a good bet.
Thanks for very useful article!
Variable mortgage rates are quite low right now and a great way to save on interest and lower monthly mortgage payments.
Thank you for posting the information about fixed rate mortgages, I was always curious about the details of how they worked, but never took the time to search or do any research. Thanks again.
This is a really good article. You highlight the key points very concisely and clearly. This information is useful now that we are going through a tough time in this economy. For new buyers these tips are excellent. Thanks.
I usually tell my buyers to pay an extra payment every year to shorten the payoff time. Adding a little each month would be easier.
Fixed rate right now is definitely the way to go… with rate at or around 5.5% that is a tremendous savings of someone paying 7% just a few years ago. With the winds of rumor blowing around about inflation in the future we could see those 7% and more sooner than later.
A fixed rate mortgage is what I would go with and pay as much possible in the period of time to help save on the back end of the mortgage.
I am a fan of fixed rate mortgages, especially if you have a tight budget.
mortgage is one of solution the financial problem but it can be add problem too.
Thanks for you information….
You make good points here about fixed rate mortgages. But remember, you can always change your rate and terms by adding additional principle to your payment each month.
I liked fixed rates and terms because you always know what you are obligated for – no surprises. You also then have the flexibility to manage the loan how you see fit.
I would like to add that with any loan, you take the longest term avaliable. This way, you have a lower payment for those months when cash is tight but you can always reduce the term by adding extra principle when you have the extra cash. e.g. a 15 year loan your payment is set at $1,000. Thus, you must pay $1,000 every month. A 30 year loan – your payment is at say $700 per month. If you have the extra cash pay the $1,000 like the 15 year loan – but, if you have a tight month, you only have to pay the $700.
With all the bad news that came from ARM’s, fixed-rate mortgages are the best bet for most people. Need to mention that the interest and principle payments stay constant with a FRM, but taxes and insurance may go up and increase the monthly payment.
You get to see what sort of length in years you can knock off. It also tells you what sort of financial saving you can expect to make. If you play around with the overpayment figure you can see that the more you overpay the more you save, in cash and years.
Yes getting the right fixed mortgage is important so that the homeowner can afford it. Otherwise it is going to cause problems.
I like the example of paying extra. I have been doing this with at least $100/month, for 3 years now and it is paying off.
Thanks for the informative read. Keep going Monty!
Thanks, this post was really helpful.
I just want to know. How about the real conditions of the property bussines in US right now?
Are there growth of demand?
Thanks so much
Great post… these are good benefits of going for a fixed rate mortgage
going variable rate just seems to risky for me and most people I’ve talked to. Thanks for confirming =]
From looking at the data, I think fixed is only good if you’re going to be in the house long enough to compensate for the extra you pay up front.
Fixed rate or bust! Anyone who chooses a variable rate loan (unless for specific application where this may be a benefit) is a FOOL!
This sounds like a great idea but does anyone know if this realy works? If so could you please comment on top of ming. thanks for the Karma Monty!
Great post man. Really informative for mortgage.
I would still prefer a flexible mortgage rate. You can never know what will happen and more flexibility would be cool then.
Fixed rates are the only way to go. I’ve seen so many people get “adjusted” right out of their home.
Hi,
the best benefit is see is it’s Inflation proof and i can plan my long term investment without worrying about variable interest rates. I have Much lower risk Your monthly mortgage payment will be the same, regardless of what current interest rates are
Some great Information, this has helped me understand fixed rate mortgages a little better. Thank you.
Interesting blog, keep up the good work
An extra benefit is the years you save are free from any payment whatsoever. Being free of your mortgage chains a few years early is a definite reality if you can pay extra now. Of course your lender will never tell you this, you have to discover this on your own.
Fix mortgages are the way to go, the market goes up and down all the time, after the recession rates are close to all time lows and new home owners should lock in fixed rates if possible. Great website by the way plenty of useful information.
Regards Lisa
this is a great post, it makes me feel much better after reading these, now i can morgage my property without a doubt
This is a great point: “Overpaying is difficult, make no mistake, but the rewards can be amazing.”
It would seem that so many never understand that simple point.
Good post.
Great Info, People doesn’t really how and what is Fixed Mortagage. Thanks for sharing.
Regards
adam
Very useful information about how to pay off a mortgage early.
I have a fixed rate and pick a payment option. I really love the loan as I have made minimum payments when necessary.
Very interesting article! Nice.
I think that fixed mortgages are more beneficial too. But thanks for the info anyway.
Great article about understanding the benefits of fixed rate mortgage.
Great article with lots of good information.
The idea is that you want to have as much control as you can over your mortage, and fix rate is a term that offers you this control.
in my opinion, these days anything but a fixed rate Mortgage is considered as a suicide. Inflation is on the way followed by interest rate hike. I can’t see the economy is getting better and the recent euphoria in the stock market will lead us to another bubble. unbelievable how short the human memory can be. to conclude beware from inflation, and beware from interest rate hike. As I said, it is only my opinion
Cheers
Fixed mortgages are great for those that plan on being in their homes permanantly, however in some cases adjustable mortgages might make sense if your know what your doing or your thinking about moving and trading upward to a slightly larger property with the proceeds of your current residence. But in most cases I agree that Fixed mortages would be best (assuming no pre-pay).
Good work, i liked your blog have a nice day
I got a fixed rate mortgage at a rate which allowed me to put tennants in the property with rent covering the mortgage payments the mortgage rates actually drop significantly but givin the same options again I would still go fixed rate as I was able to gear exactly all my monthly outgoings
I definitely agree , a fixed rate is the way to go. Even though I do not always agree with Suze Orman, she is right to suggest people lock in a 30 year fixed and then make extra payments to treat it like a 15 or 20 year. This way there is added flexibility in case your economic situation worsens.
Cool! WoW what robust article! My and my wife are a young couple 24/22 looking into buying a house in the Atlanta area – but all this mortgage stuff is a but confusing for us – I’ll be sure to pass this article on to my wife when she gets home I’m sure she will be interested in a great read like this.
Thank you for your efforts
THANKS YOUR SHARE !
thank’s has wanted to share..Nice post..
Thanks for the helpful information. I think many buyers would really appreciate the insight.
I don’t have plan to invest my money in real estate right now but later i’ll do.. nice info..
This is a very good summary. Although you did make the point that there are reasons in some cases not to go for a fixed rate mortgage, I think that the backlash from the fiasco over variable rate mortgages will be that people who really should go for a variable rate mortgage will not do so. If someone is virtually certain that they will be selling their home in a relatively few years, the price you pay for a long term commitment from your lender needlessly increases your financing cost. So if you plan to downsize, upsize, change locations or sell your home for other personal reasons, carefully consider all alternatives.
It beneficial because you get regular payments from it. And also it’s a big saving for your future.
This a very interesting topic going on here…Really learning alot from these free online resources…Hope some more god content like this will come online so we can all grab the most of it…Thanks for this great job…
I totally agree with you, Fixed rate mortgage has much more benefits. Nice article, Liked your examples.
Thanks for sharing nice article.I think people should opt a fix rate mortgage since it is more beneficial then moving rate.Their is no risk of fluctuation of interest rate.
Great post. I constantly deal with clients debating on fixed or adjustable rate mortgages. This is a great resource for them.
I couldn’t agree with you more that doing what it takes to pay off a mortgage early means more money in your pocket. As a developer I’ve seen a lot new home buyers make the mistake of spending “extra” money when they could have paid down their mortgage. Thanks for the basic and informative article!
Fixed rate mortgages can be good for first time buyers and anyone on a budget who needs the stability of a set monthly repayment. With a variable rate mortgage your payments may go up and down according to the Bank of England Base Rate. However with a fixed rate mortgage you have the security of knowing the exact amount you will repay each month, despite any changes in interest rates.
Having a UK fixed rate mortgage means the interest rate depending upon the fixed rate products available at the time, you will pay is set for a specified period. You can fix the rate for up to five years, however you may prefer to fix for two or three years. Once the fixed rate period is at an end, your repayments will revert to our standard variable rate.
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We took out a fixed rate mortgage at what was a low rate at the time (4.7%), only for us to hit the recession and interest rates drop. So now we are stuck on a fixed rate for 5 years. Although interest rates have gone up through the roof again I suppose we are better off at the minute, but there are still risks.
We paid extra on our previous home in Illinois just about every month. Result: we had the home paid of in 18 years. So, when we sold in 2007, we were very happy when the check was cut at closing.
One popular type of mortgage is the fixed rate mortgage, and these have proven very popular over the years with people that want a little stability in their properties.
I always think that a fixed mortgage is the best way to go for 95% of the people who are looking for one. Using other mortgages is what got us into this huge mess right now. If you can’t afford the payment on a fixed rate mortgage, you shouldn’t be getting a loan.
Great thoughts – and thanks for sharing. It’s great to learn more about real estate here. Before – I didn’t know quite as much.
@Bryan: Being in the trenches and fighting to save homeowners from foreclosure I definitely, definitely agree; if you can’t afford the fixed rate payment for the next 30 years, accounting for possible difficulties and hick-ups, don’t buy / refi!
Yes, keep it simple with fixed and you’ll sleep better and live longer. Thanks for sharing.
@Bryon – great advice. to may people tried to gamble and now theses are folk with out homes because of this fact.
Fixed mortgage really is the way to go. You can save tons of money that way.
I must confess that I don’t know a lot about mortage so I am very glad that I read this.
After the ARM fiasco, I always want my clients to get fixed rate mortgages. That way 5 years down the line, their payment does not adjust to where they can not afford it and then the bank take over.
Fixed definitely helps with knowing what your paymenta will be, just don’t forget you may need to remortgage when the fixed rate period comes to an end.
“If you can’t afford the payment on a fixed rate mortgage, you shouldn’t be getting a loan.”
Yeah you are absolutely right. No one in the world can spend more than he earns one the long run. That’s what banks have noticed now and in my eyes the system of mortgage loans has absolutely changed!
First i want to take full knowledge about real estate then i will think go in area of real estate you are sharing good information thanks for sharing
Nice post. Thanks sharing with us. I think inconsistent mortgage rates always disturb your payments. The interest rates have also gone up. These all things are not good for first time buyers and limited budget persons.
I want to invest my money in real estate , this is great time for this , real estate is very cheap today , no?
With interest rates being so low in the UK lendors are not offering interest only mortgages so really fixed rate mortgages seems to be the only way to go.
Good info. When the interest rates are low like now it is better to go for Fixed rate mortgage because the economy recovers the interest rate will possibly move up.
Thanks,
Leo
The fixed rate mortgages are good for buyer with small money. I have often experienced a little boost with this.
One popular type of mortgage is the fixed rate mortgage, and these have proven very popular over the years with people that want a little stability in their properties
The fixed mortgage is the best thing to do actually. The rates have never been that low
Hi,
Those on a tight budget or a fixed income can benefit from a fixed rate mortgage because of its static nature.
I would only go for a fixed rate mortgage. I would never chance it after what happened.
Really a nice and informative material about the mortgage rate most of people did not know about the rate fixing for the mortgage a new buyer can manage himself as in the start of the period and passage of the time he is managing the amount for his mortgage property.
You, guys are all right. Interesting post! And I am a person who is included in 95%, Bryan
Great post. I constantly deal with clients debating on fixed or adjustable rate mortgages. This is a great resource for them.
I believe with the dire situation with the economy and the increasing loss of employment worldwide, people with variable mortgages will be a lot better off over the ominf years. I can´t see the interest rate increasing by more than 0.5 over the next few years.
I listen to Dave Ramsey often. Dave always says, “the paid off home mortgage has taken the place of the bmw in the driveway.” So very true.
Agree with what Bryan says…
I used to tell clients: If you can’t get a fixed rate, you may want to wait.
But, this was back when they knew they could call any Joe Schmoe mortgage guy and get a loan, so usually we’d end up agreeing on an ARM of some sort (as long as it still “made sense” for them.)
Great post. Keep up the good work.
I’ve always been a fan of fixed rates for all most all my loans including mortgages. I think it is important to note that while fixed rate mortgages are the safest they can be dangerous as well if you buy a house you can’t afford.
Very interesting, your site has very good information. lol
Thanks for explaining fixed rate mortgages in easy language. I never understood it, but it’s been on the news a lot lately.
always think that a fixed mortgage
Fixed rate mortgages can be good for first time buyers
Unless you know you are only going to be in a property for a short period of time, i agree that fixed is the way to go.
I totally agree with you, Fixed rate mortgage has much more benefits. Nice article, Liked your examples.
great articles
Great!
I was looking for a long time for something like this!
At the moment the best solution is the fixed-rate mortgage, the market is too unstable to risk with a variable rate, so I agree. Thanks
I agree with Bryan. it’s best way to get loan for most people.
Give it six months and all the banks will be back to crazy lending. It happened after every other downturn so I cant see it stopping here
It’s really good article and very interesting topic, it’s explain a lot for me. I have to invest my money in real estate
If I was to arrange to get a mortgage it would be a fixed rate one. variable rate mortgages have surprised to many people in the past few years with much higher payments than they ever expected and contributed in part the increase in defaults during the past couple of years.
I’m also of the mind that easily available credit has caused the real estate market prices to soar to a point where the entire market is 300-400% over priced and the bubble is bursting and will continue to deflate for at least the next 5 years until prices come back down to a reasonable level before international fraudsters took the market between the teeth and ran with it and engaged in a orgy of profit taking.
I’m a person who lives within their means and with real estate as over priced as it is today I would not advice purchasing anything at today’s prices because I have a strong opinion that the value of what you purchase today will be 1/2 that value in 5 years.
if you search the internet i was posting under a few names last year in early 2008 and taking about the market taking a fall and prices dipping 25% at a minimum. This is happened already and with the federal government getting ready to get out of the proping up market prices will again start to fall and continue until they level out to what the average American can afford with their new lower paying jobs.
The new idea is if you can’t afford it on a 2 income salary equal to what you can earn at Walmart working 35 hours a week, then its not going to sell very well.
You can laugh at me if you want, but I have not been wrong in the past year and a half with my predictions about the economy.
I think you need to point out there are some very good reasons to go interest only with your loan. I am not disagreeing with you in general but for someone on a variable income like say a real estate agent, there are very good reasons to choose an adjustable mortgage. Not to mention those people who want to sell within 3-5 years.
Fixed mortgages makes the whole process a lot easier for all parts. There’s no need for bad surprises.
After all the trouble I would be very wary of anything but a fixed rate.
The most popular type of mortgage is the fixed rate mortgage. It’s a lot easier and safer…
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Fixed rates are great because you know where you are, every month. While interest rates are so low it would be worth moveing to one now. Overall, even if interest rates are low, a fixed rate will balance out in terms of repayments. Its the safest option in this environment.
hi.Monty.very nice article.you debut with a very great title. i like your way of describing.thanks for giving the idea’s.
Fixed mortgages makes the whole process a lot easier for all parts
Thank you for another great article. Where else could anyone get that kind of information in such a perfect way of presentation.
Basically, it’s this simple, fixed rate equals no real risk, and variable rate mortgages equal…. the dreaded risk. Would have, could have, should have, who is to know which way the markets are going to go…. especially in today’s greedy society.
I know nothing of mortages, currently renting, so thank you for this useful article – as well as the comments which are just as useful too.
We got a Floating rate loan, a year back the rate rate raised ad I was so disappointed that I should have selected Fixed rate but the within three months the rate decreased lower than I initially payed. I am happy with Floating rate but if you get loan with long duration like 4 to 10 years you better choose Fixed Rate.
I always go for a fixed rate if possible and it makes financial sense. They are more predictable, and it usually costs a good amount to refinance within a few years, usually far more than the extra interest you pay on a higher rate fixed loan.
thanks for sharing cool
im not sure, if it is the right time to invest your money to real estates. lets wait some months so banks will go back to lend a lot of money.
im thinking about it now
People have a lot of misplaced anger. It isnt the adjustable rate loans that got us in trouble it is the lax lending practices and easy to obtain financing. Adjustable rate loans are great for people that aren’t on a fixed income.
this is good information, thanks for share. I agree with ordination. it’s best way to get loan for most people.
Thanks for the information, while I doubt I’ll be investing anything in the marketing currently still some good info.
mortgages makes the whole process
I couldn’t agree more a fixed rate loan in these times is the best way to go IMHO.
I know that there are some unique situations or exceptions but overall the fixed rate is the best for all. After all if you look at what got this country in the bind its in the variable rate loans is one big reason without a doubt!
The question is what are the feds going to do to get is out of the mess they have allowed to be created by allowing these loans to take place in the first place!
process a lot easier for all parts. There’s no need
disagreeing with you in general but for someone on
We’ll be looking at investing in real estate again in the next couple of years. Great info. Thanks!
nice info, will bookmark it cause i am planning to get a new house next summer.
variable income like say a real estate agent, there are very good
in general but for someone on a variable income like say a real estate
like say a real estate agent, there are very good reasons to choose an adjustable mortgage
Good Read, We had a Fixed rate mortgage that we paid a little extra a month and payed it off in 17 years, so i do agree fixed rate work great for us and it has much more benefits for you in the long run. Nice article
All good info, but really the biggest reason to get a fixed rate is that it is simple enough that you can figure out how good your deal is. When you get an adjustable rate mortgage it is virtually impossible for a layperson to figure out whether or not the terms or any good. If you can’t tell whether or not you got a good deal then odds are that you did not.
I think you need to point out there are some very good reasons to go interest
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Thanks for the share.. This is very valuable information for me.
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I am not disagreeing with you in general but for someone on a variable income like say a real estate agent
thanks this shared
I’m just starting my search for a house, thansk for the into. I think im going to opt for a fixed rate
Nice summary!
I recently bought my first property and got a reasonable deal when I took it out pre recession.
Thanks, this helps me out. Nothing like gaining more sleep at night like you said. Way better to have a fixed mortgage rate.
I have a strong opinion that the value of what you purchase today 3 years
In many cases, fixed rate mortgage has indeed much more benefits.
I do afraid about the Penalty, and always do…
Great blog; I enjoy the diversity of topics you post about. Regarding fixed rate mortgages, I definitely agree that they are almost always superior to adjustable rates, or other gimicky loan packages. However, does it really make sense to make extra payments on your mortgage? Certainly it can provide a great emotional and/or psychological boost to see your balance decrease, but does it make prudent financial sense too? Because mortgage interest is a great tax deduction, you’re actually getting a pretty poor return on your investment with extra payments. If you’re interested in a more in-depth analysis of the fiscal prudence of paying down your mortgage, click here to see a detailed post on the subject. Again, love the blog! Keep up the good work.
Having had a variable rate mortgage I learned the hard way how this can hurt you. Never again would I take that chance.
I was very lucky to get a fixed mortgage at 4.25% a few years ago and because of that I find it easier to budget my expenses. I would highly recommend a fixed mortgage. Also, it is important to shop around in order to find the best deal.
Great post, Monty. I completely agree.
Agree completely. ARMs are a big reason why the housing market is in such bad shape right now. I never have,nor will I ever, have anything but a fixed rate mortgage.
The homeowners need of this kind of help, good information. If you have a debt like this, pay, before you pay, most you save. My house we paid a little bit more, and saved 10 000 in taxes and things like that. You will live in short way for while, but after is good.
Great article, thanks. From what we’re told here in the UK, the base rates for the Bank Of England aren’t going to move for at least 2 years. So fixed rates (especially for 2 years) aren’t really worth it! We just stick to variable because that will be probably lower, at least for the short term!
Hiya,
Just thought I’d let you know that your site looks kinda’ weird in my web browser. I’m running flock browser on a teeny-tiny netbook screen so thats probz whats causing it. Probably not an issue for most people but I thought you might want to know.
Well my parents are thinking to buy a house with mortgage but I really don’t want them to pay back for a long time…
Great post, Monty. I completely agree.
I agree with you fixed rate mortgage is really beneficial.
I’m just starting my search for a house, thansk for the into. I think im going to opt for a fixed rate
Much of these matters are driven by affordability. Trying to predict interest rate movement is really difficult and full of dangers. If you are on a tight budget and a small rise in interest rates would give you considerable difficulty then fixing should be considered. If however your mortgage cost is relatively low in comparison to your income you may wish to apply for a variable mortgage and over pay to reduce the debt.
Really a great post! Its very useful as well as informative.Keep up the good work.
Good write-up! I’m also planning to create a blog post about this… cheers