Fixed-Rate Mortgage in Carrollton
The Mortgage Ability provides prospective homebuyers in Carrollton with a wide range of mortgage choices on the market. We source our products from multiple reputable lenders to offer only the very best, value-driven financial solutions.
Set up a no-obligation consultation with one of our brokers today. Give our team a call at (214) 293-9383.
What Are Fixed-Rate Mortgages?
The distinguishing factor of a fixed-rate mortgage is that it has a set interest rate for the whole term from start to finish. The stability of a fixed rate offers applicants unparalleled predictability. With a fixed-rate mortgage, you’ll know the exact payment schedule required to pay back your loan in full. Most homebuyers appreciate the ability to make a concrete budget, so it’s no wonder fixed-rate loans are among the most in-demand mortgages in Canada.
Fixed-rate mortgages come in a wide variety of term lengths. Shorter terms, from 5-10 years in length, usually have the lowest interest rates while longer terms, ranging from 15-30 years, come with higher interest and lower monthly payments.
What Drives Change in 5-Year Fixed Mortgage Rates?
Banks and lenders calculate lending rates using Canada’s bond yields as a benchmark. Very simply, when bond yields go up, mortgage rates are liable to go up as well, and vice versa.
What’s the Difference Between Fixed-Rate Mortgages and Variable Mortgages?
There are a couple of notable differences between fixed-rate and variable mortgages. The primary one is the changeability of the interest rate. With a fixed-rate mortgage, your interest rate is locked in place until the end of the term. With a variable mortgage, though, your interest rate can go up and down with the market.
A secondary difference is their amortization periods. Due to the unchanging interest rate, a fixed mortgage is fully amortizing. This means that the loan will be fully paid off after the last scheduled payment.
The amortization period is not guaranteed with a variable mortgage, however. For instance, if your interest rate increases every year, and your monthly payment remains the same, more of your money is put against interest than equity every month. The result is that by the end of the term, there may still be a balance of equity remaining.
What Are the Pros and Cons of a Fixed-Rate Mortgage?
The biggest cited advantage of a fixed-rate mortgage is its predictability. Homebuyers often have set incomes. With a stable payment plan, they can budget accordingly without worrying about market conditions. The downside is that the predictability sometimes comes at a premium. If market conditions do fall, you’ll be stuck paying a higher interest rate.
Get in Touch to Discuss Fixed-Rate Mortgages
Deciding between mortgage plans can be a challenging task for even experienced property owners. At The Mortgage Ability, we take the burden of searching for the perfect mortgage off your shoulders. Our knowledgeable brokers will carefully present every option available to you. We’ll work collaboratively with you and our lender network to find the best value product for you.
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