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Fixed Rate Mortgage

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A fixed rate mortgage, has an interest rate that remains constant throughout the life of the loan, as opposed to an adjustable-rate mortgage (ARM) in which the interest rate can fluctuate based on market conditions.

A fixed-rate mortgage is the preferred choice for borrowers seeking safety and stability. Although a fixed-rate mortgage might not have an interest rate as low as a rate of an adjustable-rate mortgage, its rate - as well as its monthly principal and payment - will not change. That feature allows homeowners to make long-term financial plans.

When mortgage interest rates are low, as they are today, many homeowners trade adjustable-rate mortgages for fixed-rate home loans in order to guarantee low rates for the life of the mortgage.

Three factors are involved in determining the size of a homeowner's principal and interest payments of a fixed-rate home loan: the size of the mortgage loan, the interest rate, and the length of the term. Larger loans, higher interest rates, and longer terms typically mean larger monthly payments.

Fixed-rate mortgages with shorter terms generally mean lower interest rates and higher payments that allow homeowners to pay off their mortgage sooner.

The most common fixed-rate mortgage loan is the 30 year fixed rate mortgage, which offers low monthly payments to the homeowner.

Total Mortgage offers the additional flexibility of other fixed-rate loans terms including the following loan types:

  • 10 year fixed rate mortgage. The 10 year fixed rate mortgage offers the lowest interest rate of any fixed rate home loan and pays off the mortgage the fastest.
  • 15 year fixed rate mortgage. The 15 year fixed rate mortgage is a common choice for borrowers who want to lower their rate and pay off their mortgage soon.
  • 25 year fixed rate mortgage. The 25 year fixed rate mortgage can be a good compromise between a 30 year fixed and 15 year fixed rate mortgage. The fixed rate home loan has a lower interest rate than a 30 year fixed but a smaller monthly payment than 15 year fixed rate mortgage.
  • 40 year fixed rate mortgage. The 40 year fixed rate mortgage helps borrowers qualify for home loans and offers lower payments by stretching out the loan term.

Loan amounts over the conforming limit, the amount that Fannie Mae and Freddie Mac can purchase or guarantee, are called nonconforming or jumbo mortgages. Both fixed-rate loans and adjustable-rate mortgages are available for jumbo mortgages.

For more information about using a fixed-rate mortgage for a home purchase, visit our home purchase center.

For more information about fixed-rate home loan refinancing, visit our home refinance center.

To find how much your monthly payment will be with a fixed-rate loan or how much you will save by refinancing, use our mortgage calculator.

For more details about fixed-rate mortgages, call 877-868-2503 to speak to a Total Mortgage loan expert now.

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