Adjustable vs Fixed Rates
When choosing a mortgage, one of the first decisions you will hear about is whether the rate is fixed or adjustable. Both options affect how your interest rate behaves over time, and each works better in different situations.
What Is a Fixed Rate Mortgage
A fixed rate mortgage has an interest rate that stays the same for the life of the loan.
This means your monthly loan payment remains predictable, which many buyers find comforting when planning long term budgets.
What Is an Adjustable Rate Mortgage
An adjustable rate mortgage starts with a fixed rate for a period of time, then changes periodically based on market conditions.
The payment may increase or decrease over time, depending on how rates move.
How Buyers Think About This Choice
Fixed rates are often chosen for stability and long term planning.
Adjustable rates may appeal to buyers who expect changes in income, plan to move, or want lower payments early on.
Which One Is Better
There is no universal answer.
The right option depends on how long you plan to stay in the home, your comfort with payment changes, and your overall financial goals.
What Comes Next
Explore more guides in the Learn Hub or try the Home Readiness Check™ to see how prepared you are for buying a home.