Mortgage Options

Fixed vs. Adjustable

The simple fact is, choosing the right mortgage for your situation and budget is one of the most critical decisions you have to make. Do you choose a fixed rate mortgage that offers fixed monthly payments? Or an adjustable rate mortgage that offers lower payments in the early years? It pays to do your homework.

Before you decide, there are a few important questions you need to ask:

  • How long will you be in your new home?

  • Will this be the last house you live in?

  • Do you expect your income to rise?

  • What is the current interest rate environment?

As a general rule, a fixed rate mortgage is ideal if you plan to live in your home for a longer period.

With a fixed rate mortgage, you'll:

  • Lock in a fixed interest rate for a fixed number of years, usually 15, 20, or 30 years, no matter what happens in the market.

  • Know exactly how much you owe each month, making budgeting easier.

  • The benefit of a fixed rate mortgage: The predictability of fixed monthly payments.

If you plan to live in your home for a shorter period of time, usually seven years or less, an adjustable rate mortgage may be the right choice. With an adjustable rate mortgage, you'll lock in a fixed rate for a certain number of years and then each year after, your rate will adjust annually.

With an adjustable rate mortgage, you will:

  • Keep your payments lower in the early years when your income is lower.

  • Be able to qualify for more money and potentially get a bigger home.

  • Be protected by interest rate caps, which limit how much your rate can increase by in a given adjustment period.

  • The benefit of an adjustable rate mortgage: Flexibility.

Mortgage Programs

Metro offers a variety of mortgage programs for you to choose from. Two popular options for first time homebuyers and those with low to moderate income include FHA and MassHousing.