Fixed or Variable Rate—What's Right for You?

With a fixed rate loan:

• Your interest rate will be higher, but you will know exactly how much interest you'll pay over the loan term.
• Your payment amount and term will not be affected by changes in interest rates.
• You can still switch to a variable rate at any time if rates fall.

With a variable rate loan:

• You could save money if interest rates are already low or fall further.
• If interest rates rise, your payments will likely stay the same, but your amortization term (how long it takes to pay off your loan) will increase.
• If interest rates fall, your payments stay the same and your amortization term will decrease, meaning you could pay off your loan sooner.