Fixed Rate Mortgage

Fixed Rate Mortgage:

A fixed-rate mortgage (FRM) is a fully amortizing mortgage loan. This means the interest rate and payment remain the same for the duration of the loan. 15-year and 30-year fixed-rate mortgages are the most common, although other terms are often available (from 10 to 50 years).


small_checkmark Rates and payments remain constant
small_checkmark Loan is paid off in full at end of term
small_checkmark Ability to budget based on a fixed cost
small_checkmark Loan will not adjust upward with the market (even if rates hit 20%)
small_checkmark Simple to understand
small_checkmark Great for first-time home buyers
small_checkmark Significant property interest write-off during the early years


red_x Usually more expensive than adjustable rate mortgages (ARMs)
red_x Rate will not adjust downward with the market (even if rates hit 1%)
red_x You must refinance to take advantage of lower rates
red_x The largest portion of the payment goes toward interest during the early years

Interest and Equity

In general, the longer the term of the fixed-rate mortgage, the more interest you will pay over the life of the loan. Longer terms usually come with higher interest rates, but lower monthly payments. The shorter the repayment term is, the lower the interest rate will be and the faster you’ll pay off and build equity in your home, though your monthly payments will general be higher.