| Adjustable Rate Mortgages |
Fixed Rate Mortgages |
| Advantages |
Disadvantages |
Advantages |
Disadvantages |
| Lower initial monthly payment |
More risk |
Monthly payments are fixed over the life of the loan |
Higher interest rates |
| Lower payment over a shorter period of time |
Payments may change over time |
Interest rate does not change |
Higher mortgage payment |
| Rates and payments may go down if rates improve |
Potential for high payments if rate goes up |
Protected if rate goes up |
Rate does not drop if interest rates improve |
| May qualify for higher loan amounts |
|
Can refinance if rates go down |
|
