Loans Outside the Box

With a fixed-rate mortgage, you know exactly what your principal and interest payment will be every month. It won’t change because your interest rate won’t change. There is only one instance in which your total payment will change when you have a fixed-rate mortgage. If you pay your home insurance and real estate taxes through your mortgage, any time there is a change in those costs, there will be a change in that part of your mortgage payment as well. If interest rates go up, you’re protected with a fixed-rate mortgage. But you won’t benefit if rates go down. You can, however, take advantage of falling rates by refinancing.