Differences Between Adjustable-Rate and Fixed-Rate Mortgages

Differences Between Adjustable-Rate and Fixed-Rate Mortgages

A fixed rate mortgage offers a steady payment over the life of the loan. If mortgage rates drop in the future and you want to take advantage of those rates, you will need to refinance your house. If rates go up in the future, you’re protected from those rate hikes.

For many first-time home buyers, a fixed rate mortgage is a great option.

An adjustable rate mortgage can go up due to the structure of the loan, or when the index of interest rates rises. If your loan is structured with a low introductory rate, study your loan agreement to determine:

  • when the rate will change
  • if there’s a cap on the interest rate you’ll ultimately pay
  • how low your interest rate will be allowed to drop
  • how often the rate will be adjusted
  • if a refinance option is available with the same mortgage company

Tight Housing Markets

If the housing market is tight and prices are high, an adjustable rate mortgage with an introductory low rate may be a good option for a first time buyer. However, it’s a very good idea to get the home refinanced before the end of the introductory offer to protect your finances from market volatility.

Bad Credit

If you’re working to increase your credit score but need to buy your house now, you may be able to access an adjustable rate mortgage to keep your payments low while you work on your credit score and before you refinance to a fixed rate mortgage.

This takes determination and focus. It can be very tempting to spend a bit wildly on your new house. If you use an adjustable rate mortgage with a low introductory rate to reduce your expenses and improve your credit, then keep going on that credit repair goal. Don’t open new accounts, take out other loans or get new credit cards.

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This desired flexible Cumberland floor plan offers room to grow and adapt to your lifestyle. The two-story foyer includes two large closets for coats and seasonal storage. The main level features a spacious family room, dining area, and kitchen, all bathed in natural light with panoramic backyard views. The upgraded kitchen layout includes granite countertops, a tile backsplash, and a stainless steel appliance package with a gas range. A powder bath and laundry room with pantry shelving are conveniently located off the kitchen. For your enjoyment, a deck is located off of the dining area. Upstairs provides a private family retreat with a generously sized owner's suite, including an ensuite bath with a double bowl vanity and a walk-in closet. Three additional bedrooms, a second full bath, and a loft complete this home. RevWood Select Granbury Oak flooring is throughout the main living areas and ceramic tile is installed in the wet areas. Jagoe TechSmart components are included. You'll love this EnergySmart home! $340,800 Active

1398 N Hunters Crossing Circle Huntingburg, Indiana

4 Beds 3 Baths 2,151 SqFt 0.21 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

Now is your chance to own this inviting 3-bedroom, 1.5-bath home nestled on a spacious corner lot in Ferdinand. Step inside to a welcoming and roomy living area, perfect for relaxing or entertaining. The open-concept kitchen and dining area offer plenty of space to gather and enjoy meals together.  Just off the dining room, you'll find a convenient laundry area. Washer and Dryer are included.  One of the standout features of this home is the expansive, sun-filled sunroom—an ideal space for entertaining guests or unwinding in comfort.  Step outside to your private oasis: a fenced backyard with an in-ground pool, perfect for summer fun and outdoor living. There's also additional yard space outside the fenced area for added enjoyment or potential expansion. The attached one-car garage includes built-in shelving for storage and a bar area—offering a perfect retreat from the sun during those hot summer days. Recent Updates Include: Roof (2024), HVAC System (2020), Windows (2018), Water Heater (2022). Don’t miss this wonderful opportunity to enjoy comfort, convenience, and summer-ready outdoor space—all in a desirable location! $254,700 Active

601 E 21st Street Ferdinand, Indiana

3 Beds 2 Baths 1,562 SqFt 0.33 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

Situated on a 1.15 acre lot in Jasper is this 1708 sq. ft. stone home. Features include 3 bedrooms, a partially finished basement, a 2 car attached garage and 2 outbuildings.  There is also an additional storage area with a single overhead door located just off of the garage. The large welcoming front porch leads to a spacious living room. The adjacent room between the kitchen and living room could be used as a sitting room or a formal dining room. There is also a 2nd floor attic space that could be completed for additional bedrooms. The full basement offers a family room, a work shop, a second kitchen, the laundry space, and some bathroom facilities. Newer septic was installed approximately 10 years ago. Home also has replacement windows in  most of the home. The HVAC was updated in 2013 as well as the water heater. Make this spacious property your own with some tender loving care and attention. There is original hardwood floors under the bedroom carpets. Property is being sold "AS IS". $239,900 Active

1800 N 350 W. Jasper, Indiana

3 Beds 2 Baths 2,218 SqFt 1.15 Acres

Listing courtesy of Gary Schnell from SELL4FREE-WELSH REALTY CORPORATION.