Should I Lock My Mortgage Rate Today? Pros and Cons
Whether or not to lock your mortgage is a personal decision that depends on your circumstances. There are pros and cons to consider before making a decision.
One of the main benefits of locking in your mortgage is that it protects you from interest rate rises. This means you’ll know exactly how much your repayments will be, and can budget accordingly. Another advantage of locking in is that it can give you peace of mind. If interest rates rise, you won’t have to worry about your repayments going up. This can take a lot of stress and worry off your plate.
However, locking in your rate also means that you may miss out on lower rates if they become available. This could end up costing you more in the long run. There’s always the chance that rates won’t change at all, and you could have saved yourself the hassle and expense of locking.
When weighing the pros and cons here are some things to think about when making your decision:
- How long do you plan on staying in your home? If you think you may move within a few years, it may make sense to lock in a low rate now.
- Are interest rates currently low? If rates are already low, you may not save much by locking in.
- How stable is your income? If you are self-employed or have a variable income, it may be riskier to lock in your rate.
- How comfortable are you with risk? If you are comfortable with taking a risk, you may want to wait and see if rates fall.
Locking your mortgage has advantages and disadvantages, and it ultimately depends on personal preference. While some people prefer the security of knowing their interest rate won’t rise, others are willing to take the chance in the event that a lower rate becomes available. Before deciding whether or not to lock your mortgage, it is crucial to consult with a financial counsellor and seek professional guidance. They will be able to assist you in weighing the benefits and drawbacks and selecting the option that is ideal for your specific situation.