Last week, we discussed the pros and cons of a fixed-rate mortgage.This week, we’re talking about its scary cousin: variable-rate mortgages.
Just like the fixed-rate option isn’t always the best option, the variable rate option isn’t either. Sometimes it doesn’t make sense to take out a mortgage with a variable rate, yet other times it does.
variable-rate mortgage is pretty much what it sounds like: a mortgage with a interest rate that varies. Whereas a fixed rate stays constant throughout the term of your mortgage, a variable rate (and your monthly payment) stays the same throughout the term.
Here are some pros and cons to help you decide whether a variable-rate mortgage is for you:

  • If the interest rate drops, your interest payments drop, too.
  • If the interest rate drops, but you keep paying the same amount, you could pay off your mortgage more quickly.
  • Historically, variable rate mortgages are cheaper over time.


  • If interest rates rise quickly, your interest payments rise, too.
  • It’s harder to budget for if rates change frequently
  • You have to keep an eye on interest rates, you can’t just set it and forget it

While it’s important for you, as a homeowner, to make informed decisions when signing a mortgage, always be sure to contact a mortgage professional to answer your questions.