Fixed Rate Mortgage Loans
Fixed rate mortgage loans are one of the most popular and predictable home loan options available. With this type of mortgage, your interest rate stays the same throughout the life of the loan, meaning your monthly principal and interest payments won’t change. This stability makes it easier for homeowners to budget long term and plan their financial future. Whether you're buying your first home or refinancing, fixed rate loans offer peace of mind in a fluctuating market.
What is a Fixed Rate Mortgage?
A fixed rate mortgage is a home loan where the interest rate remains constant for the entire term of the loan—usually 15, 20, or 30 years. This means your monthly payment for principal and interest won't increase over time, regardless of market conditions or changes in interest rates.
Is a Fixed Rate Mortgage Right for You?
A fixed rate mortgage is a great choice if:
However, it might not be ideal if you plan to move or refinance in just a few years or you are looking for a lower initial interest rate and payment.
How Fixed Rate Mortgages Work
With a fixed rate mortgage, your loan is amortized, which means each monthly payment goes toward both the interest and principal balance. The key benefit is that your payment stays consistent, helping with financial planning and peace of mind.
Common Fixed Rate Loan Terms:
- Principal: The original loan amount
- Interest Rate: The percentage charged for borrowing the money
- Loan Term: The length of the loan, commonly 15 or 30 years
- Monthly Payment: The fixed amount paid each month (excluding taxes and insurance)
| Loan Amount | Loan Term | Interest Rate | Monthly Principal & Interest |
|---|---|---|---|
| $300,000 | 30 Years | 6.5% | $1,896 |
| $300,000 | 15 Years | 6.0% | $2,531 |
| Loan Amount | $300,000 |
| Loan Term | 30 Years |
| Interest Rate | 6.5% |
| Monthly Principal & Interest | $1,896 |
| Loan Amount | $300,000 |
| Loan Term | 15 Years |
| Interest Rate | 6.0% |
| Monthly Principal & Interest | $2,531 |
Note: Taxes, insurance, and HOA fees are not included in the monthly payment above.
What To Know About Fixed Rate Mortgages
Fixed rate loans are straightforward and easy to understand. Here’s how they function:
- Your interest rate stays the same for the life of the loan—no surprises, no adjustments.
- Monthly principal and interest payments remain consistent, making it easier to budget over time.
- Early payments are interest-heavy, but over the years, more of your payment goes toward reducing the principal balance.
- Loan terms are typically 15, 20, or 30 years, with 30 years being the most common for first-time buyers.
- You’re protected from market fluctuations, which means rising interest rates won’t affect your loan.
