A fixed-rate mortgage charges a set interest rate that doesn’t change throughout the life of a loan. 23 News mortgage expert Terry Bloom says no matter what the economy does, we’ll know how much our monthly payment is. This means we won’t take a hit when rates go up. But oftentimes, and application fee of a few hundred bucks is required and only low risk borrowers qualify. The interest rate for an adjustable rate mortgage varies over time, which could mean lower payments for the first few years, but after that Bloom says, be prepared to pay big.
Bloom says most of his clients opt for fixed rate mortgages for the psychological stability.