Fixed Rate Mortgage

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This is a mortgage with an interest rate that does not change. When you are looking for a mortgage to buy property, a fixed rate mortgage means that the interest rate is fixed for the entire period of the loan. It also means that your monthly repayments will be fixed at the same amount. One possible drawback of a fixed rate mortgage is that the lender will usually charge the borrower a slightly higher interest rate than it would for an adjustable rate mortgage. As the buyer you have a decision to make: do you take a higher guaranteed fixed rate or a lower adjustable rate that may only be guaranteed for a shorter time and that may jump significantly when the rate is reset? Note that even though the repayments are fixed, your property taxes will almost certainly increase, so your total monthly cost will probably not stay unchanged for the entire period of a fixed rate mortgage.