Mortgage loan interest rate

Mortgage loan available on property or your home is definitely an amazing introduction for the people who always has this dream of having a home of their own. However, the loan has its own implications according to which it charges an rate of interest to borrowers on the borrowed amount. The rate of interest remain same for the entire term of the loan. Though now there are various other option available for the borrowers to switch the mortgages in order to lower the amount to be paid as an interest on the same. However, this all depends on lenders, if the person lending your the mortgage agrees for the switch.

Mortgage loan interest rate different as per the type pf mortgage borrowers has applied for. However, choosing the right mortgage type is one of the most challenging part here. Some of the different types of mortgage loans available for the users include -

  • Low-interest rate mortgage
  • Adjustable rate mortgage
  • Interest only mortgage
  • Assumable mortgage
  • Fixed rate mortgage
  • Reverse mortgage

The two most commonly equipped mortgage types includes - Fixed rate mortgage (FRM) and Adjustable rate mortgage (ARM). Talking about FRM, the interest rate and the monthly system remains fixed for life of the loan. Whereas, in ARM, the interest rate remain fixed for a specified time period which after that will be adjusted up or down periodically depending as per the market index.

Fixed-rate mortgage is perfect fro the circumstance if you have a plan to be in your home for more than seven years. This will offer you predictable payments and long-term protection against rising mortgage interest rates. However, if you plan to be in your home for seven years or less, an adjustable-rate mortgage (ARM) could be more beneficial. Keep in mind that with an ARM, your monthly payments have the potential to go up each time your interest rate adjusts.