What Are 3 Types of Mortgages?
There are different types of loans, and many to choose from. However, it is important to know what they are, and how they benefit you. There are three main types of mortgages, which are fixed-rate loans, variable rate loans and toggle offset loans. Here we will explain what they are for you to know which one to choose.
Fixed-rate loans are loans that are fixed for a given amount of time. The interest rates for these loans remain the same throughout the period of the loan, with no variation whatsoever. These types of loans usually last ten years or more.
With these loans, you should expect to pay the same amount every month which allows you to feel more secure on your payments since you won’t pay any surprise fees for this type of loan.
With variable-rate loans things work out a bit differently. Instead of paying the same amount every month, you will be paying varying prices throughout the months. With variable-rate loans, the interest rates may rise above or fall below the market standards. These loan options can be a good option if you are looking for more flexibility in your payments.
With variable loans you are able to make extra repayments and there are no hidden fees associated with doing so.
Toggle Offset Loans
Toggle offset loans are similar to fixed rates, and variable rates. If you like the certainty of fixed-rate loans, and the flexibility of variable loans, then this might be the perfect loan for you.
For this, you get the best of both worlds where one of your loans is fixed and the other half varies.