Fixed Rate Mortgages

The decision to agree to a fixed rate mortgage is usually a safe bet providing you are happy with the monthly repayment right from the start. Buying a home later in life means that many people want to have the mortgage paid off early. Although before signing any documents, there is a great deal to consider.

One important point is to ensure that the interest rate doesn’t change during the life of the loan. It is always wise to avoid agreements that appear to too good to be true because they invariably are. Loans arranged for a long term fixed rate mortgage keep the same interest rate throughout the entire life of the loan agreement. This has obvious benefits, especially for anyone who doesn’t like surprises especially those associated with variable monthly mortgage payments.

When we were looking to buy a home, my wife and I decided to go for a loan with a fixed rate mortgage. We wanted to pay off the house as soon as possible but didn’t want to get in over our heads with high monthly payments.

Considering an even longer term mortgage was one option if we could not afford the monthly repayments on a 15 year plan. The problem was that we weren’t very happy about having a mortgage still running close to when we both retired and hoped that a 15 year fixed mortgage rate would still be available to us. There was obviously very good reasons to finish paying the loan off early if at all possible.

Taking everything into account we finally went for the easier 30 year fixed mortgage rate plan instead. Discovering my wife was pregnant was the clincher, although this wasn’t the only reason we reached this decision. Because my wife wanted to raise our child at home we couldn’t be certain of her monthly financial contribution to our household expenditure. Also, loans for a 15 year fixed mortgage rate required a higher monthly payment. For us it just wasn’t feasible as we would just be in over our heads and probably be worrying about money every month.

After looking at the much lower amount we would be making on our monthly payments with a 30 year fixed rate mortgage, there wasn’t any option but to go with it. Fortunately, we are also able make extra payments throughout the year to make the principal shrink faster. We also found that we could reduce the number of years left on the mortgage by making these odd payments. This is well worth the effort in the long term but it does require some discipline.

Taking our current needs and financial abilities into account was more important than our desire for a shorter term 15 year fixed mortgage rate plan. fixed rate mortgage (also; long term fixed rate mortgage, 30 year fixed mortgage rate, 15 year fixed mortgage rate, monthly payment, monthly mortgage payment).