Adjustable Rate Mortgage

When choosing the right mortgage, it's helpful to know how mortgage rates work. There are two types of mortgages available in the market. The first one is a fixed rate mortgage, where the rates are set for the duration of the loan term. The second one is the adjustable rate mortgage.

When it comes to adjustable rate mortgages, there really are no guarantees.

Interest rates will either go down or it will go up. Lower interest rates mean lower monthly adjustable-rate mortgage payments. Higher interest rates mean higher monthly adjustable-rate mortgage payments for you. There is no middle ground. Adjustable rate mortgages are basically a trade-off – you exchange more risk for a lower rate.