3 Instances When You Shouldn't Take a Fixed Mortgage

A fixed mortgage can be a great tool to use in many situations. However, there are certain times when it is not in your best interest to take a fixed mortgage. There are many other mortgage programs out there that could potentially benefit you depending on your circumstances. Here are a few instances when you should not take a fixed mortgage.

1. Moving Soon

One time that you may not want to take out a fixed mortgage is when you plan on moving soon. If you are not going to be in the house long enough to worry about the interest rate increase with a variable rate mortgage, then a fixed mortgage is unnecessary. With an adjustable rate mortgage, you can usually get at least five years of a low fixed rate. Therefore, if you are going to sell your house in three years, you do not need a fixed mortgage.

2. Refinancing in the Future

Many people plan on refinancing their mortgages in the future. If you plan on refinancing in the next few years to get cash out, then a fixed mortgage is not necessary. 

3. Fixed Interest is High

When the fixed interest rate is high, you may be better off getting an adjustable rate mortgage until the rates come back down. Then you can always refinance into a fixed rate later.