Fixed vs Adjustable Rate Mortgage
There are two main types of mortgages. A fixed-rate mortgage locks in the same interest rate and payment for the life of the loan. An adjustable-rate mortgage (ARM) can change its rate — and therefore your payment — as market rates shift.
We recommend a fixed-rate mortgage. Here's why.
Why Fixed Wins
Peace of mind matters with debt. With a fixed rate, your rate can never rise and your payment never changes. If you're earning a high income as an ER physician, the last thing you want is financial uncertainty tied to a variable-rate loan. That stability is worth a lot.
ARMs can tempt you into buying more house than you should. Sometimes ARM rates start lower than fixed rates, and that lower initial payment can make a larger home feel affordable — until the rate adjusts upward. In our view, that's a mistake. Buy the house you can afford on a fixed rate.
30-Year vs. 15-Year Fixed: Which Is Right for You?
The two most common fixed-rate mortgages are the 30-year and the 15-year. The 30-year carries a slightly higher rate but a lower monthly payment. The 15-year has a lower rate and gets you debt-free faster — but costs more each month.
Example
Buy a $500,000 home with 20% down. You put $100,000 down and borrow $400,000.
30-year fixed at 6.25% → monthly principal & interest = $2,463
15-year fixed at 5.75% → monthly principal & interest = $3,322
Your total monthly payment will be higher if you escrow for property taxes and homeowner's insurance.
The 15-year gets you to the finish line sooner and saves a significant amount in total interest. But the monthly payment is meaningfully higher. If you have any doubt about your ability to handle the higher payment comfortably, choose the 30-year. You can always pay extra toward principal each month and reduce your payoff timeline — but you can't go back and lower the required payment if money gets tight. As we like to say: peace of mind matters with debt.
Additional Resources
Ready to put this into practice? If you're an ER physician or high-income professional looking for straightforward, evidence-based financial guidance, we'd love to connect. Schedule a free intro call with Yahara Wealth Management — no pressure, no sales pitch, just a conversation.
This content is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Mortgage rates and monthly payment figures are illustrative and subject to change. Please consult with a qualified financial advisor before making any borrowing decisions.