Is 10 year fixed rate mortgage for you?

10 year fixed rate mortgage offers certainty that your mortgage will be the same throughout the loan term.

07:19 28 August 2013

Are you considering 10 year fixed rate mortgage? Then, you need to understand its pros and cons.

Perhaps the biggest advantage of 10-year rate mortgage is that it gives you peace of mind knowing that your monthly repayments will stay the same. This means regardless of interest rate movement, you will not pay for more than you expect to pay at any point in time. This gives you the freedom to effectively budget your money. This also gives you an assurance that you’ll never have to worry about unpleasant surprises. Also, this type of mortgage gives you the opportunity to save money should the interest rate increase within the 10-year period.

However, just like other types of mortgages, this one also comes with disadvantages. As the interest rate is fixed throughout the loan term, this may mean missing on lower interest rates that may become available in the future. Also, 10-year fixed mortgage rates usually do not allow you to make advance payments without charges. Not only that, this type of mortgage is also often more expensive when compared to tracker or variable rates.

Now that you know the pros and cons, you decide if 10 year fixed rate mortgage rate is for you.