A fixed-rate mortgage is a housing loan secured by the real estate it’s purchasing. Unlike an Adjustable-Rate Mortgage (ARM), which carries an interest rate that can alter periodically, a fixed-rate mortgage maintains the same interest rate throughout the loan’s duration. Therefore, fixed-rate mortgages are generally perceived as less risky compared to ARMs.

The assurance of a fixed-rate mortgage should be considered under the following circumstances:

  • Anticipating a future rise in interest rates
  • Doubting the possibility of refinancing your mortgage down the line
  • Not expecting significant increase in your income in the future
  • Having a low tolerance for risk