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Should I choose a fixed-rate or adjustable-rate mortgage?

Short answerFixed-rate mortgages keep the same rate for the life of the loan, which suits buyers who value predictable payments and plan to stay long term. Adjustable-rate mortgages start lower and adjust after an initial fixed period, which can work if you expect to sell or refinance before the adjustment. Compare the worst-case adjusted payment, not just the starter rate.
Reviewed by Juan Fernando Romero, NMLS 2557318Updated

The details

Common ARM structures like 5/6 or 7/6 fix the rate for 5 or 7 years before adjusting every 6 months within caps.

If you choose an ARM, make sure you could still afford the fully indexed, capped payment if your plans change.

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