> The "right" answer is to go with a shorter-term, variable rate, because on average you'll pay less interest than longer-term/fixed rates.
My 30 year fixed-rate mortgage at 2.6% begs to differ ;) Yes, I had lucky timing; I was able to refinance right at the start of 2022 when rates were pretty much at their lowest.
But overall, I think your assertion isn't correct. It really just depends on conditions. If rates are in general very low, you probably want that fixed-rate mortgage, even if the variable one is -- at least for now -- a little bit lower. In the US, most people get 30-year mortgages, and it's pretty much impossible to predict what rates will be like in 10, 15, 20, 25 years.
If rates are higher, and you believe the reason for that is temporary (like the inflation reduction measures going on now), a variable-rate mortgage is probably a good gamble. If rates drop, you can always refinance (either into another variable-rate mortgage, or to a fixed rate).
Honestly, the 7% now on a 30-year-fixed isn't that bad, historically. It just feels bad because we had such low rates in recent years.
My 30 year fixed-rate mortgage at 2.6% begs to differ ;) Yes, I had lucky timing; I was able to refinance right at the start of 2022 when rates were pretty much at their lowest.
But overall, I think your assertion isn't correct. It really just depends on conditions. If rates are in general very low, you probably want that fixed-rate mortgage, even if the variable one is -- at least for now -- a little bit lower. In the US, most people get 30-year mortgages, and it's pretty much impossible to predict what rates will be like in 10, 15, 20, 25 years.
If rates are higher, and you believe the reason for that is temporary (like the inflation reduction measures going on now), a variable-rate mortgage is probably a good gamble. If rates drop, you can always refinance (either into another variable-rate mortgage, or to a fixed rate).
Honestly, the 7% now on a 30-year-fixed isn't that bad, historically. It just feels bad because we had such low rates in recent years.