Most of the time, when people purchase homes, they apply for a mortgage. There are many things to consider to be ready for putting in that application. One of these things is choosing which type of mortgage is best for you.

Aryeh Brecher, Senior Loan Officer at FML Loans, explains here the two main types of mortgage.

Fixed Rate Mortgage: Stability and Predictability

A fixed rate mortgage is a popular choice among homebuyers seeking stability and predictability in their monthly payments. With a fixed rate mortgage, the interest rate remains constant throughout the life of the loan, typically spanning 30 years. This means that regardless of fluctuations in the broader interest rate market, the homeowner’s monthly mortgage payments will remain unchanged.

Fixed rate mortgages are known for providing long-term financial stability and are a suitable option for buyers who plan to stay in their homes for an extended period.

  • Pros:
    • Predictable monthly payments.
    • Protection against interest rate increases.
    • Ideal for long-term homeownership.
  • Cons:
    • Initial interest rates may be slightly higher compared to initial rates of ARMs.
    • Less flexible in terms of adjusting to potential decreases in interest rates.

Adjustable Rate Mortgage (ARM): Flexibility and Risk

An adjustable rate mortgage (ARM) offers a different structure compared to a fixed-rate mortgage. In an ARM, the interest rate is fixed for an initial period, typically ranging from 3 to 10 years. After the initial period, the interest rate adjusts periodically, usually annually, based on a specific index and margin. This means that the homeowner’s monthly payments can fluctuate, potentially resulting in lower payments during periods of low interest rates but higher payments when rates increase.

  • Pros:
    • Lower initial interest rates, which can lead to lower initial monthly payments.
    • Potential for lower overall interest payments if rates remain stable or decrease.
    • Suited for short-term homeownership or those who anticipate financial changes in the near future.
  • Cons:
    • Uncertainty in future monthly payments due to potential interest rate fluctuations.
    • Risk of higher payments if interest rates rise significantly.
    • Can be challenging to budget for fluctuating payments.

It’s not a secret that the rates have risen over the past little while. As of the writing of this article, the rates are hovering at 7.25% yet at the same time the buyers are definitely out there giving offers.

There are many homes that we have in the market and almost every home has some offer on it. I’m not saying that it’s an offer the sellers want to take right away, but there’s definitely offers that are coming in and buyers are out there looking and opting for the ARM in order to combat the high interest rates. They are looking into it as a short-term solution because the time is right for them to buy a house.

Obviously not here to give any specific advice. You have to discuss with your financial planner and mortgage broker to see what works best for you and your family, but this is something that people have been looking into and it has been working out for many.


Midwood gets its name from the Dutch word “midwouot,” which means “middle woods.” A spread-out, suburban haven in the middle of NY City, this has quiet parts and is a family- and community-oriented place. As such, Midwood is one of the safest neighborhoods not just in Brooklyn but also in NY City.

***FUN FACT ***

As of writing, the current mortgage rates are 7.54% for a 30-year fixed mortgage and 6.89% for a 15-year mortgage.

Below is a diagram from ValuePenguin showing the rates from 1971-2022, a span of 51 years.