One of the biggest decisions when buying a house is choosing the right mortgage. Unlike in other countries, there are relatively fewer kinds of housing loan in the Philippines, which are all reasonably straightforward. The most popular one is perhaps the fixed-rate mortgage, which comes with its pros and cons.
Should you take out a fixed-rate mortgage? You should if you…
Plan to Stay for Good
Any financial-related Lancaster New City review would only recommend this loan when moving and selling your house isn’t part of your plans. If you’re buying your would-be primary residence, a fixed-rate mortgage can be advantageous to keep over the long haul its interest remains the same from the first to the last month.
On the contrary, applying for it isn’t a good idea if you’re just going to be in town for a few years. In this case, you might be better off renting a house or an apartment to save money.
Can Afford a Higher Monthly Payment
Unlike the interest rates of hybrid loans that are considerably low over a specified period, those of fixed-rate mortgages are generally above average. If your bank account permits comparatively high monthly payments, consider a fixed-rate loan. In return, you can enjoy the incentive of having a mortgage proof against market forces.
You might even save money with it over time with inflation. If the price of everything increases when money depreciates, your mortgage payments would remain fixed. In a way, it could feel cheaper in the long run.
If you don’t want to always worry about how much your mortgage would cost every few years, then take the fixed-rate housing loan route. It provides the luxury of peace of mind. With it, you’d know beforehand how much you need to set aside every month for your mortgage expense, experiencing no bill shock.
Take a good look at your situation, and think with the foresight to determine whether a fixed-rate housing loan makes sense for you. Speak with a trustworthy real estate agent to explore your mortgage options to figure out the best for you.