Understand fixed and variable-rate mortgages, estimate payments, and compare options confidently.
Mortgages finance home purchases with collateralized loans secured by the property. Borrowers choose terms and rate structures that balance payment stability against potential cost savings.
Evaluate differences in payment stability and initial costs
Fixed rates provide payment certainty. Variable rates may start lower but can adjust upward, changing monthly costs and total interest.
| Feature | Fixed | Variable |
|---|---|---|
| Payment Stability | High | Low to Medium |
| Initial Rate | Higher | Lower |
| Adjustment Risk | None | Present |
Discount points reduce rates for upfront cost. Balance points against time horizon to determine breakeven on interest savings.
Clear answers to common mortgage questions
A larger down payment lowers monthly costs and can improve terms. Consider liquidity needs and other financial priorities.
Paying points can reduce your rate. Estimate breakeven time based on upfront cost and monthly savings to decide.
Credit profile, loan-to-value, occupancy, and market conditions influence offered rates and terms.
Variable loans adjust based on indices and margins after fixed introductory periods. Understand caps and adjustment schedules.