What is one disadvantage of a fixed-rate mortgage loan?

A fixed-rate mortgage loan guarantees that the interest rate remains the same throughout the duration of the loan, which provides stability and predictability in payments. However, one disadvantage is that the interest rate on a fixed-rate mortgage is typically higher than that of adjustable-rate mortgages or other types of loans that may have lower introductory rates. This higher initial rate can result in larger monthly payments compared to loans with lower initial rates, making it a less attractive option for borrowers who anticipate interest rates falling or who only plan to stay in the property for a short time.

Choosing a fixed-rate mortgage generally favors those seeking long-term security over those who might benefit from potentially lower short-term rates of other loan types. Thus, while a fixed-rate mortgage can be advantageous for financial planning, the trade-off is the higher cost in terms of interest over the life of the loan compared to options that may offer lower introductory rates.