I'm sure this has been discussed but I can't get the search to bring anything up. We are buying a house and the fixed rate is 6.25% while the variable is 5.25% for the first four years, then add 2%. We have budgeted for the higher amount. So now we are wondering if it would be better to take the variable and then sink the extra monthly cash directly into the principle. I know we would have to be really strict with ourselves about this and also watch the rates to know when to refinance.
Is this a good plan? Will doing this and then refinancing on the lower amount save us money? Is it too risky? Any advice is appreciated.
Is this a good plan? Will doing this and then refinancing on the lower amount save us money? Is it too risky? Any advice is appreciated.