FIXED VS VARIABLE RATES
When applying for a mortgage, there are two different rates to consider, a fixed rate or a variable rate. Which one you choose is your choice, but depends on your budget and overall financial goals.
A fixed-rate loan has the same interest rate throughout your borrowing term. This is a beneficial rate for borrowers that prefer predictability and standardized monthly payments. This will help borrowers to financially plan and budget their payments accurately.
A variable rate loan's interest rate will change over time based on the national interest rate. Variable-rate loans are beneficial because they tend to have lower interest rates compared to fixed-rate loans. There is always the potential that the interest rate will go higher, costing the borrower more money in interest. It is a good choice for those who plan to pay off their loan quickly.
|Fixed Mortgage Rates - Closed||Everyday Rate||Limited Rate|
|Variable Mortgage Rates - Closed||Everyday Rate||Limited Rate|
|HELOC Rates - Open||Everyday Rate||Limited Rate|
OPEN VS CLOSED MORTGAGES
Another aspect you need to consider when applying for a mortgage is whether you want it to be open or closed. An open mortgage can be entirely paid off at any time during your loan term. A closed mortgage, however, does not let borrowers entirely pay off a loan and only allows for a limited amount of pre-payments.
In most cases, a closed mortgage is the better option. This is because they tend to come with a lower interest rate. This is a good option for those planning to stay in their property for a long time as it offers security. Open mortgages can be beneficial for borrowers who want to pay off their loans quicker, especially if you're considering selling your property soon.
We Make it EASY
Highline Mortgage will help you figure out which type of payment plan is the best option. As we foster open communication, all of this will be explained in detail to you, and we will outline the benefits and drawbacks of each payment option, ensuring your specific needs are met.