Fixed-Rate Mortgage in Plano
The Mortgage Ability has earned itself a reputation in the area for their comprehensive fixed-rate mortgage options, their superior customer service, and their consistently competitive rates.
The path to homeownership is easier than you think. Speak with one of our agents today—drop us a line at (214) 293-9383.
What Are Fixed-Rate Mortgages?
In Canada, the majority of home buyers opt for fixed-rate mortgages. A fixed-rate mortgage is a loan in which the interest rate is locked in until the end of the term length. Term lengths vary depending on the product you choose, but they often come in 5-, 10-, 15-, 20-, and 25-year terms.
The interest rate of your mortgage will vary based on your term length. Generally, interest rates climb in conjunction with term lengths. More simply, the longer the term length, the higher the interest rate. Longer terms are not all bad, though. Typically, a longer term means lower monthly payments, which is often more feasible for homebuyers with set incomes to maintain.
Our agency offers a full spectrum of term length loans. Plus, no matter the length of the loan, thanks to our extensive lender network, our products always boast some of the lowest interest rates on the market.
What Drives Change in 5-Year Fixed Mortgage Rates?
5-year fixed mortgages are a widespread favourite among homebuyers because of their low-interest rates. But how is the lending rate determined in this popular loan option?
Lending rates in fixed mortgages have a positive relationship with Canada’s 5-year bond yields. Banks use current bond yields to predict the risk of lending. When bond yields drop, they will often cut interest rates to entice potential borrowers.
What’s the Difference Between Fixed-Rate Mortgages and Variable Mortgages?
The primary difference between a fixed-rate mortgage and a variable mortgage is in the name: fixed mortgages maintain a constant, fixed interest rate until maturity, whereas variable mortgage rates vary, fluctuating year to year.
Fixed mortgages are also fully amortizing, which simply means at the end of the term, the loan will be 100% paid off. A variable mortgage, on the other hand, isn’t necessarily matured at the end of the term, due to the inconsistent interest rates.
What Are the Pros and Cons of a Fixed-Rate Mortgage?
Homebuyers tend to prefer fixed-rate mortgages because of their stability. With a stable, unchanging monthly payment, you can budget your finances accordingly. There is no risk involved in a fixed-rate mortgage—the contract says precisely how much money and how much time is required to pay off the loan. The downside is that with no risk, there is no opportunity to save money. Variable mortgage rates have the potential to decrease, meaning you might pay less overall than with a fixed mortgage.
Profit from the Reliability of a Fixed-Rate Mortgage
Fixed mortgage rates are an excellent choice for homebuyers who want a stable, consistent monthly payment. At The Mortgage Ability, we offer a broad array of fixed mortgages in Plano.
Are you interested in learning more about your borrowing options? Our brokers will gladly sit down with you and share our industry expertise. We’ll help you compare and contrast term lengths and lending rates to find the best loan for your lifestyle and budget.
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