You always know what your monthly payments will be, so you can plan your budget more easily

Your monthly payments may be larger than with ARMs

Your mortgage won't increase if interest rates go up

You won't benefit if interest rates drop, and have to refinance to get the lower rates

Low initial rates reduce your closing costs and early monthly payments

It's hard to plan for long-term housing costs, since monthly payments can change yearly

Your interest rate will drop if interest rates go down

Interest costs may jump after the teaser rate expires

You may have to pay more interest if rates go up

Allows you to get a bigger loan and more house for your money

If your house doesn’t appreciate, you may owe money when selling

Initial monthly payments can be very low

When paying only the interest, the principal does not decrease and you do not build equity in your home unless it appreciates in value

You must budget wisely and make lump-sum payments towards the principal