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The Pros and Cons of Fixed-Rate Mortgages

The 15-year and 30-year loan terms are the most popular loan terms among fixed-rate mortgages. Other loan terms include 10, 20, and 25 years, although, the longer your loan term is, the higher the interest rates will be on your monthly payments.

Take a look at the brief strengths and weakness of FRMs below and see if this type of loan suits your financial aspirations.

The advantages of fixed-rate mortgages

FRMs make it easy to plan and budget for the future. The last monthly payment you make on the loan will be the same throughout the full-length of the loan term.

Simple to understand.
You don't need to be particularly knowledgeable of accounting terminology to handle the finances of a fixed-rate mortgage since it's pretty straightforward.

Fixed interest rates.
When the economy's rates are soaring and everybody is taking the plunge, your rates will remain fixed. Furthermore, if you're interested in actively building home equity, knowing exactly what your interest rates will be at any point can give you the confidence you need to plan effectively for a home improvement.

Budgeting accuracy.
You can take advantage of the current rates if you know that higher interest rates are imminent. 

Ideal for the long-term.
FRMs provide the security and stability needed for people willing to stay in their homes for many years to come. 

Peace of mind.
Paying a little more for peace of mind is money well spent. Knowing exactly how much you owe at any moment will make financing much easier without unwelcome surprises.

The disadvantages of fixed-rate mortgages

Unchanging rates.
Everybody will reap the benefits of lower rates while yours remain fixed.

Inability to save more money.
Even though you've been methodical with the way you save money, you can't save more than you already have with fixed rates unless you cut down on your own expenses.

Can be more expensive.
The interest rates of an FRM are higher than the initial rates of adjustable rate mortgages.

FRMs doesn't have the customization options to deal with unique financial situations. 

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