Asked by Daniel  |  Submitted August 13, 2015

Is there an easy way to understand and choose types of interest for beginning borrowers?

Report Question Report

  Leave Answer

Sign in to MoneyTips
By submitting you agree to our Terms of Service

  Answers  |  1

August 18, 2015

If you're asking about mortgage interest types, Daniel, there's only two: Fixed rates, which stay the same the entire term of the loan, and adjustable rates, which are fixed for a defined period (typically 5, 7, or 10 years), then adjust annually afterwards. In general, adjustable rates are more suited to borrowers with a bit of risk tolerance, with the ability to handle potentially higher payments when their loans adjust, and who may be planning to move within a relatively short time frame. Hope that helps! Ted

$commenter.renderDisplayableName() | 09.29.20 @ 14:23