Fixed or variable mortgage

[beekeeper]

Is a fixed-rate mortgage only appropriate when you can't insure yourself against the risk of an interest rate increase?

I have a fixed-rate mortgage but I am thinking of switching to a variable rate. Mortgage payments make up only a small part of my budget and so the fixed-rate seems like an unnecessary form of insurance. Reading MMM has made me want to stop buying insurance against risks that would be merely a nuisance rather than a catastrophe.

[Bbqmustache]

You are turning your fixed rate into insurance, and it is not insurance, it is your mortgage.  The way I look at fixed versus variable is this:
If you KNOW that you will be moving before the rate jumps up too much, consider a variable.
If you plan to stay where you are for more than 5 years, stay with fixed rate.

But wait;  if you know you are moving in 5 years, why did you buy a house in the first place?

STAY WITH YOUR FIXED RATE!  But if you are out of debt otherwise, and you are throwing a lot of money into retirement, do some amortization calculations at bankrate.com and see what adding extra principal to your mortgage payment every month will do to get you out of the mortgage FOREVER!