This is a fundamental question when you're financing a home in Fort Mill, Waxhaw, or anywhere in the Charlotte metro area. The choice between fixed and adjustable rates can significantly impact your monthly payments and overall costs, so let's break it down clearly. A fixed-rate mortgage keeps the same interest rate for the entire loan term – usually 15 or 30 years. Your principal and interest payment stays exactly the same every month, which makes budgeting predictable. If you get a 6.5% rate on your Ballantyne home, that rate never changes, whether market rates go to 3% or 10%

This stability is especially valuable if you plan to stay in your Indian Land or Weddington home for many years. An adjustable-rate mortgage (ARM) starts with a lower interest rate for an initial period, then adjusts periodically based on market conditions. A 5/1 ARM, for example, has a fixed rate for the first 5 years, then adjusts annually. The initial rate is typically 0.5-1% lower than fixed rates, which can mean significant monthly savings early on. On a $400K loan, that could be $200-300 less per month initially

The risk with ARMs is that rates can go up – sometimes significantly. Most ARMs have caps on how much the rate can increase each year and over the life of the loan, but you could still see your payment jump substantially. This could be problematic if you're stretching to afford a home in Marvin or other pricier areas. ARMs can make sense if you plan to sell or refinance within the initial fixed period, or if you expect your income to increase significantly. They're also worth considering if you think rates will drop in the future

But for most buyers looking at homes in Pineville or throughout our Charlotte metro area, the predictability of a fixed rate is worth the slightly higher payment, especially in uncertain economic times.