A fixed-rate home loan has the interest rate fixed for the entire life of the loan, usually 15, 20 and most commonly, 30 years. It’s super predictable and safe, so it’s a popular way to go. Most people take a 30- year fixed-rate loan.

An adjustable-rate loan will have an initial period where the rate is fixed, after which it will change for the life of the loan and oftentimes, your payment can go up. It can go down too. So for example, if you take a 7/1 ARM, your rate stays the same for 7 years, then adjusts with the market every year for the remaining 23 ( 7 + 23 = 30).

Most ARMs will start at a lower interest rate than fixed-rate mortgages. But most people will sell or refi within 10 years, so don’t be too quick to rule out an ARM if you think you might be going that way.

If you’re confident which side you fall on, go for it, otherwise talk it through with your Loan Guide. They’re not commission-based like with most other lenders, but are paid to take the weight off your shoulders and get your closing done fast.
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