Fixed rate mortgage
A fixed rate mortgage is a type of loan, specifically associated with housing and real estate purchases, that provides a set interest rate which will hold all throughout the lifetime of the loan. This means that no matter how long it takes to pay the loan, and whether or not changes occur in the market during this period, the buyer is secure in the fact that interest rates will not change. One of the best things about this set up is that it is very simple and easy to understand, which is a great feature for new investors as well as those who are not very knowledgeable in mortgage.
Aside from this, fixed rate mortgages carry less risk than variable rate mortgages do. Since the buyer is assured of being imposed with a set interest rate until the loan is completely paid, then he does not have to worry about changes in the market that may cause increases in interest rates. Of course, those who were unlucky enough to take out a mortgage during a period of high interest rates will have to bear with this expense until payments have been completed. As such, it makes sense for buyers to take a look at the trends and if possible, wait for a period during which interest rates are relatively low before deciding to apply for a loan.
Another thing that first-time buyers might appreciate is the fact that having a fixed rate mortgage allows them to manage their budget easily. From the start, they know how much they will have to pay, which will allow them to allocate remaining funds to other necessary expenses.