Refinance for beginngers
Whatever rate you pay at the start of the loan, that is the exact same rate you pay until the end of the loan. You pay a premium for the certainty of a fixed payment since lenders usually charge slightly higher interest rates for a fixed rate home mortgage. On the other hand, the interest rate for adjustable rate mortgages "adjusts" as national interest rates rise and fall. When interest rates are high, your mortgage payments increase; when interest rates are low, your mortgage payments decrease accordingly. Because banks have less risk with adjustable rate mortgages, they set the interest rate on this type of mortgage lower than they do for fixed rate loans.