What are the advantages of 30-year mortgage rates? Many new home buyers like the lower starting interest rates available on adjustable rate mortgages. They see these hybrid ARMs as a big advantage, because the rates are fixed for a period of years before resetting to a variable interest rate. It allows them to qualify for a larger home. However, an ARM has distinct disadvantages when it comes to managing your personal finances and keeping your house payments under control.

Here are some of the advantages to consider with a fixed rate 30-year mortgage:

1. The interest rate remains constant. If you fix your mortgage rates at the lowest fixed 30-year mortgage rates in decades, you will have the same rate for the life of the loan. That means you are not going to see a minor rate adjustment on an ARM loan make your payments outrageous.
2. Payments remain constant. When interest rates start rising, it becomes difficult to refinance an adjustable rate mortgage.  Borrowers will start seeing, their mortgage rates start going up. Let’s look at an example. A mortgage of $300,000 with an initial mortgage rate of 4%, you will have a payment of $1,432.25 per month. If that rate goes up to 6.5%, the payment goes up to $1896.20. If the rate goes up to 9%, the payment goes up to $2,413.86. If you got a fixed rate 30-year mortgage at 6%, the payments would be $1798.65 with no chance of adjustment.
3. Budgeting is easier. You have a fixed payment. You know that each month for the next 30 years. You will need to pay $X. As your income increases over time, that amount stays the same. You can use the extra income to save for retirement or to pay down the principal on your mortgage. The choice is completely up to you.
4. A fixed rate 30-year mortgage allows you to weather rate changes with grace. One of the biggest problems in recent real estate troubles is the adjustable mortgage rates that started going up. A single percentage rate chance can make your payments jump quickly. With a 30-year mortgage refinance, that is never a concern. Your neighbors will sweat while you smile and shake your head.

These are a few of the advantages of a 30-year fixed rate mortgage refinancing. With that fixed payment amount, you will only need to adjust payments as your escrow changes. Your principal and interest will remain the same. You can pay the loan ahead with extra money you get. However, you will never have to scramble to make a mortgage payment that just jumped by a couple hundred dollars a month.

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