Written By Jennifer Wilson

Choosing a mortgage product can be tricky whether you’re getting your first loan or re-entering the market after a long time. A Mortgage lender is the best resource in determining what product you choose. Here is a basic breakdown of fixed-rate vs adjustable-rate mortgages.

Adjustable-Rate Mortgage – Usually named in two numbers, such as 5/1 ARM or 10/1 ARM. The first number (“5” or “10”) indicates the period the loans interest rate is fixed, while the second number (“1”) specifies the annual frequency the interest adjust after the initial fixed period. The introductory rate lasts 10 years and after that, the rate can change once a year after one year.

These scenarios are best for you if you plan to stay in the home for short period of time, if you want to get a larger loan to purchase a nicer home or you anticipate a lifestyle change.


  • You’ll have a lower initial monthly payment
  • Riskier Mortgage
  • Loan terms can be difficult to understand

Fixed-Rate Mortgage – Payment is fixed for the entire term of the loan. Most common terms are 30-year and 15-year fixed mortgages.

This is a popular choice for most home buyers. These scenarios are for those looking to purchase forever home and want stability.


  • Interest rates and payments remain same for entire loan
  • Terms are simpler to understand
  • You can refinance if you want to take advantage of lower interest rates
  • Your upfront costs may be more expensive.

For both loan options, you and your lender will need to carefully access your financial situation, your long-term plans, and whether choosing one over the other will make more sense to you in the long run.

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