With the stock market dropping more than one thousand points in the past week, with the rates are still good it’s the perfect time for you to get a loan. The question is whether you should get a fixed or variable rate on your mortgage.
Pros and Cons of Fixed Rates
Fixed rates have been the go-to for many homebuyers recently, with one of its most appealing aspects being that its long-term effects can be predicted easily. They offer stability in the changing stock market. Taking a fixed rate loan can be very helpful as it prevents your interest rates from rising with the market. For example, with the market as low as it is now, taking a fixed rate can easily shield you from rising interest rates if the market recovers. However, if the market continues to drop, you’ll be paying a much higher rate than you would’ve with a variable rate loan.
Pros and Cons of Variable Rates
The market, as said before, has been dropping and there hasn’t been a better time to get a variable rate loan. Having a variable rate mortgage means to have your APR change according to the stocks. It is also beneficial if you will only hold the property for a short period of time. The variable rates can work much better for you comparing with a fixed rate loan. With the market dropping the way it is now, getting a variable rate can help immensely if you’re in need of money or in a short term situation. However, if the market gets back on its feet, you’ll have your APR rising with it.
