Adjustment Frequency

by Prime Radar Team  August 6, 2015

Question:

Hey PRIME PH! I currently live in an apartment in Makati but I desire to move to a house near Ortigas. I was exploring the types of mortgages available to me; one of them included an adjustable-rate mortgage. Someone tried to explain the concept of adjustment frequency to me but I’m confused about all the technicalities and how it would impact how much I pay per year. May you please help me in making this clear to me before I make any decision?

Answer:

Greetings! When someone mentions adjustment frequency, they are highlighting the regularity by which the interest rate changes on your adjustable-rate mortgage. To be more specific, you would be seeking a mortgage that has a lower rate-adjustment frequency. A lower frequency would make you less prone to financial risk. The only potential downside is that you may be requested to pay a higher initial interest rate to compensate for the lower interest rates.

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