Flexible Mortgage Could be a Help or a Hurt

A Flexible mortgage is not for the weak of heart. Choosing this route can be a gamble, but it can also be a great money saving experience.

When the interest rates are low, it is smart to lock into a fixed rate; one you know will never rise even when the prime rate does. Flexible mortgages become more enticing when the prime rate has moved upward.

Flexible rate mortgages start out at a lower rate (often significant) than fixed rates. Then depending on how they are set up, the rate is locked in for the first few years. After that initial grace period, things can get ugly. In the late 70’s many people found their interest rates climbing into the 20% zone and their payments pushed them right out of their homes.

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