Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Choosing a Fixed Rate Mortgage over a Variable Rate Mortgage

By Crowin Smith Subscribe to RSS | December 13th 2011 | Views:
loading
 
  



Borrowers in Australia are divided between variable and fixed loans. When choosing between the two, one would have to analyze the market trend in relation to his or her financial goals and needs. The economic climate can change erratically at any given moment. Back during the 1980s, interest rates in Australia jumped by 17%. The Reserve Bank for its part did whatever it can to slow down the economic turmoil by implementing several increases in rates. It was during this particular period when a lot of home owners decided to sell their properties because they no longer have the means to fulfill their monthly mortgage obligations. While the market continued to experience a pile up of properties, their values dropped. A lot of homes were sold for very low prices. In the United States , the result of the property bubble were similar. There was a high rate of foreclosure and the price of properties was very low. After the rates increased, those who took advantage of low-priced properties were no longer able to pay their monthly dues. Nobody had anticipated the jump in interest rates that time. Australia on the other hand is trying to avoid another 17% increase. Today’s low interest rates, when compared with those of the 1980s, are responsible for a lot of people incurring record high debts. Some predict that should interest rates go below17%, borrowers will have a problem.

One way to avoid the perils of rising mortgage rates is to secure a fixed rate mortgage. This type of loan allows you sit back and relax because you will not be affected by any mortgage rate increase. This makes budgeting easier since you won’t be anticipating any added payment on your mortgage. Still, the most important benefit of a fixed rate loan is the security they provide against rising mortgage rates, which means the borrower has little to worry about losing his or her property to foreclosure since repayment will not be a problem. As a rule of thumb, it is advisable for most people to lock at least half of their mortgage in a fixed rate while the other half remains as a variable rate. This allows them to enjoy both worlds: security against rising interest rates and low interest payments when official rates go down.

Most of the time, borrowers with fixed mortgages are not allowed to refinance. They will be charged with high exit fees if they decide to switch to another loan.

When figuring out how much your monthly repayment will be for your fixed rate loan, all you need to do is use a fixed rate mortgage calculator, which also allows you to compare fixed mortgage rates with variable mortgage rates.

Crowin Smith - About Author:
For more information regarding Fixed Rate Mortgage, Please visit Cashbackmortgage.com.au

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/mortgage-articles/choosing-a-fixed-rate-mortgage-over-a-variable-rate-mortgage.htm

Related Mortgage Articles Subscribe to RSS

How to procure loans at Best adjustable mortgage rates?
Published by Jack Smith on June 24th 2012 | Mortgage
The above points can easily help a borrower to seek loans at best rates while saving his money and m...
 
The best mortgage rate is only a systematic approach away!
Published by Jack Smith on May 22nd 2012 | Mortgage
Investigate the property market well and fulfill your dream of achieving the best mortgage rate for ...
 
Exploring best adjustable mortgage rates as per expectations
Published by Jack Smith on July 23rd 2012 | Mortgage
The act and need for searching best adjustable mortgage rates is common in the world, where people s...
 
Find the perfect california mortgage broker online
Published by Apil Gupta on June 24th 2012 | Mortgage
The importance of finding a good California mortgage broker online is paramount in today's times, pa...
 
Top 3 benefits of mortgage services for real estate investors
Published by Lending Expertsca on May 11th 2012 | Mortgage
Mortgage services offer several types of financial services for real estate investors as well as for...
 
Your guide to getting the best mortgage rates
Published by Jack Smith on April 18th 2012 | Mortgage
A systematic and well guided approach will certainly assist you in achieving the best mortgage rate ...
 
Be informed about Colorado mortgage or Denver mortgage and make a wise decision
Published by Serena Woods on February 15th 2012 | Mortgage
Being informed is never bad especially when you need to make an important financial decision....
 
Why is an adjustable rate mortgage so popular?
Published by Apil Gupta on June 24th 2012 | Mortgage
An Adjustable Rate Mortgage (mortgage ARM, for short), also known as the lender's Standard Variable ...
 
Fall in mortgage rates leads to better home sales
Published by Apil Gupta on July 16th 2012 | Mortgage
Riding high on the phenomenally low mortgage rates, there has been an increasing demand for new US h...
 
Understand and consult bad credit mortgage rates
Published by Jack Smith on July 23rd 2012 | Mortgage
The people seeking bad credit mortgage rates first require to conduct complete research and pay atte...
 
US mortgage reforms on the way
Published by Apil Gupta on July 16th 2012 | Mortgage
The US mortgage industry is set for reforms in the form of shorter forms, if the Consumer Financial ...
 
Good mortgage rates are important for a comfortable mortgage period
Published by Jack Smith on June 22nd 2012 | Mortgage
Get mortgage rates that you can easily pay off even in the future because a mortgage affair can last...
 
Get smart about mortgage rates
Published by Jack Smith on April 12th 2012 | Mortgage
The huge variety of mortgage rates makes it much simpler for the buyer to identify and take up the r...
 
Beware of Yield Spread Premium on California mortgage rates
Published by Apil Gupta on June 24th 2012 | Mortgage
If you are going to refinance your mortgage because the California mortgage rates on your current pr...
 
How can a mortgage loan calculator help you save
Published by Apil Gupta on June 24th 2012 | Mortgage
There would be many of you out there who would be considering taking a mortgage loan for fulfilling ...
 
Lay your hands on the best mortgage rate in the market!
Published by Jack Smith on April 14th 2012 | Mortgage
While it may be a challenge to find the best mortgage rate¸ a good lender company can always make y...
 
US mortgage rates hit record low at 3.66%
Published by Apil Gupta on July 16th 2012 | Mortgage
There was a significant drop in the US mortgage rates for 30 year fixed loans...
 
Best mortgage rate California – Use these time-tested tips
Published by Apil Gupta on June 24th 2012 | Mortgage
Finding the best mortgage rate California is more often than not like locating a needle in a haystac...
 
Finding cheap Arizona auto insurance
Published by Auto Insurances on January 13th 2012 | Finance
Let’s not take more risks with our valuable autos. While applying for Arizona auto insurance make ...
 
Low interest rate brings cheaper mortgage deals
Published by Sandra Jeux on January 25th 2012 | Mortgage
Interest rates are at the lowest side for mortgages at current time which is leading people of the c...