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Types of Mortgage Rates

There are primarily two types of mortgage rates: fixed and adjustable. A fixed-rate mortgage offers stability, as the interest rate remains constant throughout the loan term, making it easier to budget. On the other hand, an adjustable-rate mortgage (ARM) typically starts with a lower rate that adjusts over time based on market conditions. While ARMs can offer initial savings, they carry the risk of rate increases in the future.

Choosing between these options depends on your financial goals and risk tolerance. If you plan to stay in your home for a long time, a fixed-rate mortgage might be more beneficial. However, if you anticipate moving or refinancing in a few years, an ARM could offer initial savings.