09/28/2022
For homeowners who are considering converting to a fixed rate from a variable rate, the good news is that there’s no penalty for doing so. However, the homeowner must stick with their current lender and take the fixed rate that’s currently being offered.
When switching to a fixed rate, homeowners must convert to a term that’s either equal to or greater than the remaining time on their current mortgage term. If there are three years left on the mortgage term, a homeowner would have to switch to at minimum a new three-year term. Another option would be to switch to a new five-year fixed-rate term. The one key rule is that switching to a fixed rate can not shorten the mortgage term.
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Variable mortgage rates are rising, which might have some homeowners wondering if they should convert to a fixed rate. But one expert it’s not a “foregone conclusion" that everyone should make the switch