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Fixed Rate Mortgage Pros and Cons

Many people are getting confused when they are going to a mortgage broker and they need to choose if they want a fixed rate mortgage or not. But, before you can make that decision, you need to make sure that you know all the pros and cons of this type of mortgage. Many people are making the wrong decision because they don’t know everything there is to know about fixed-rate mortgages.

Pros: Interest rate can’t increase

The great thing when you are making use of a fixed rate from your mortgage broker Melbourne is that your interest rate isn’t going to increase. It doesn’t matter if the interest rates are increased during the year. Your interest rate is staying the same.

This is because you have signed for a fixed rate mortgage. You have one interest rate that you are going to pay for the whole period. Even, if you are repaying your mortgage for 20 years.

Cons: paying higher interest rate than other mortgages

One of the cons of having a fixed rate mortgage is the fact that you are going to have higher interest rates than other mortgage premiums. This means that the total amount that you are going to repay is going to be much higher than those people that didn’t choose the fixed rate mortgage from mortgage brokers.

This is why you should make sure that this is exactly what you want. Many people aren’t satisfied with the fact that they are paying more at the end of the day.

Pros:  Monthly premiums are staying the same

We don’t want to have monthly premiums that are going up and down every month. You don’t know what your premiums are going to be and it is making it hard to budget.

When you are choosing the fixed rate mortgage from mortgage brokers Melbourne, you will have the same premium for the whole period of the mortgage loan. You will never have to worry about what your premium is going to be the next month.

Cons: the monthly premium is going to be higher

Because your premium isn’t going to change ever, the premiums are going to be higher than those people that didn’t choose the fixed rate mortgage option. It might be great to have a premium that doesn’t change ever, but then you need to be satisfied with a premium that is going to be high. This can also make it hard to get an approved mortgage loan. Because you might not be able to afford the higher prices.

Fixed rates mortgages. Should you consider it or not? There are many things that you need to know about these types of mortgages. And, with these pros and cons, you will know for sure that you are going to make the right decision. You will then not be one of those that are wondering if they really made the right choice because they didn’t think it through and didn’t consider all the facts about having a fixed rate mortgage from mortgage brokers.