Fixed versus Adjustable

Interest rates for mortgages remain the same for the full amortization of the loan with fixed rate mortgages while adjustable rate mortgages have fluctuating interest rates. The beginning interest rate for adjustable mortgages is usually quite low, making it very attractive initially, but the potential for the interest rate to go higher is always present. Principal payments for fixed rate mortgages do not change unless the borrower refinances the loan.