Skip To Content

Adjustable vs Fixed Rate Mortgages – What’s Right for You?

Mortgages can seem like an impossible puzzle at times. The different mortgage types are particularly confusing to new and experienced Albuquerque home buyers alike. 

Mortgages come in two forms: fixed-rate mortgages and adjustable-rate mortgages. There are pros and cons to each type of mortgage, which can make it difficult to decide.

When you’re trying to decide which mortgage to choose, we’re here to help! The purpose of this article is to delve into the details of each mortgage type and discuss which type of home buyer is most suitable for each. 

What is a fixed-rate mortgage?

Fixed-rate mortgages have a fixed interest rate. Your interest rate will not change outside of your agreed contract. Despite inflation, your mortgage interest rate will remain the same throughout the term of your loan. 

Customers who do not want to risk rising interest rates tend to favor fixed-rate mortgages. Fixed-rate mortgages provide you with a guaranteed rate throughout the life of your loan, unlike other loan types that may be affected by inflation.

In addition to not going up, the interest rate on a fixed-rate mortgage won’t go down either. In some cases, this means that you might miss out on competitive interest rates when mortgage lenders can afford to offer lower rates.

The interest rates offered by fixed-rate mortgage loans will vary from one lender to another. Hence, it is worth your while to shop around. 

What is an adjustable-rate mortgage?

Adjustable-rate mortgages are the opposite of fixed-rate mortgages. In this case, the interest rate can change according to market conditions. This means that the interest rate on your mortgage can change as the loan term progresses.

Adjustable-rate mortgages have the main advantage of allowing interest rates to decrease when market conditions allow it. This can result in lower rates for homeowners than those with fixed-rate mortgages.

A variable-rate mortgage can, however, increase over time. As mortgage terms can last for considerable periods of time, the exact interest-rate movement cannot be predicted. Adjustable-rate mortgages allow you to adjust the amount you pay back according to market conditions.

With some adjustable-rate mortgages, interest rates are capped at a certain level. You should always check this before you make a decision, as this could offer some protection against price fluctuations.

Fixed-rate vs adjustable-rate: What are the differences?

Mortgages of both types differ largely in how interest rates are affected by the market. Your monthly interest payment will remain the same with a fixed-rate mortgage. An adjustable-rate mortgage, however, may fluctuate.

It is notable that adjustable-rate mortgages typically have a lower initial interest rate than fixed-rate mortgages. This can make them more appealing to buyers, but you should always consider possible price increases.

A good credit history is required for both types of mortgages. Additionally, both fixed-rate and adjustable-rate mortgages require repayment over time.


4501 ATHERTON Way NW, Albuquerque, NM 87120High atop in Placitas with magnificent sunrise & sunset views of mountains & mesas!! Lots of natural light, wood beam ceilings, open plan, 3 living areas, sep study/office plus In-law/guest suite! REFRIG AIR! Living room features cozy Kiva fireplace & wall of windows w/mtn views! Formal dining room &butler pantry. Beautiful kitchen has SW style cabinets, island, built-in oven, gas cooktop, bkfst bar & nook w/banco. Private master suite features a sitting room/office, fireplace, sep shower, huge walk-in closet & covered patio with views! Secondary bdrs w/Jack-N-Jill bath! Lower level walk-out living room/game room/media room! 3CG. paved driveway & cul-de-sac location. Natural landscape, 2 waterfalls, covered portals & private courtyard to enjoy the beauty and nature of Placitas!REQUEST MO

Exquisite custom Tuscan home-in the gated community of Oxbow North. Impeccable hand crafted cabinetry throughout, travertine tile with inlay, gourmet kitchen with Wolf Appliances and Sub-Zero Refrigerator. Commercial grade radiant heating system (plus central forced air).Two master suites, 3 custom fireplaces, tiled balcony with breathtaking views of the city and mountains. Surround sound in great room and loft area, 4 car tandem garage..and so much more. Enjoy your next memorable home.

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

Trackback from your site.

Sandi Pressley

Albuquerque New Mexico Real Estate YOUR SOURCE FOR ALBUQUERQUE REAL ESTATE! Sandi Pressley offers unparalleled service to ALL clients in Albuquerque and surrounding communities in the New Mexico real estate market. Sandi's motto is "Putting You First." Your complete satisfaction with our service and representation is our number one priority. As a native of Albuquerque, Sandi Pressley has been dedicated to serving her client's real estate needs for over 45 years. Sandi has achieved a goal unprecedented by any other Realtor of being the #1 Top Producing Realtor for 38 consecutive years in all of Albuquerque as well as the entire state of New Mexico. She is also the #1 Top Producing Realtor for the entire Western Region and 8th in the Nation with Coldwell Banker National. Sandi Pressley serves the entire Albuquerque New Mexico real estate market including the surrounding communities such as Rio Rancho, Placitas, Corrales, Bernalillo, Northeast Heights, North Albuquerque Acres, Sandia Heights, High Desert, Foothills, Four Hills, UNM, Nob Hill, Ridgecrest area, Uptown area, North Valley, Northwest Heights, Paradise Hills, South Valley, Southwest Heights, Bosque Farms, Los Lunas, Cedar Crest, Tijeras, and all East Mountain areas. Whether you are considering buying a home, selling a home or both, we know these areas inside and out.

Leave a Reply