Posted by: islamicfinancingnews | December 9, 2013

Here’s why a fixed rate mortgage might be the right choice for you

Staying Sharia compliant means the first choice you need to make are Islamic mortgages. That way you’ll be free from riba and able to stay on the right side of your beliefs. Still, there are other choices you need to look at like whether a fixed rate or variable rate mortgages suits your plan better. mortgage rates

For new homeowners, a fixed rate is often the better idea for a number of reasons. As the name suggests, the amount you’ll pay over the amortization period stays the same and that can be a real bonus when you’re getting used to the extra payments a home requires. Of course with the fixed rate option, the rates can either decrease or increase and neither will affect the final amount, but there is at least one big drawback to the fixed rate as well.

When the rates go down, you’ll miss out on the added advantage of the savings on the interest portion of your payment. Although the interest rates are still near or at historic lows now, combining a fixed rate mortgage with Islamic finance is an option new homeowners should consider. However, if you have stable employment and a more adventuresome spirit, looking at the variable rate is possible too.

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