Fixed-Rate Mortgage
Quick Answer
A mortgage where the interest rate remains the same for the entire loan term.
Definition
A mortgage where the interest rate remains the same for the entire loan term.
Explanation
Fixed-rate mortgages offer predictable payments. The rate is locked at closing and never changes. Terms: 10-30 years. 30-year has lower payments but more interest; 15-year has higher payments but saves significantly.
The most popular home loan type, representing over 80% of purchases. Best for long-term homeowners wanting stability.
Example
30-year fixed at 6.5% on $350,000 = $2,212/month for 30 years, $446,428 total interest. 15-year at 5.5% = $2,859/month, $164,790 interest. Savings: $281,638.
Frequently Asked Questions
What is Fixed-Rate Mortgage?
A mortgage where the interest rate remains the same for the entire loan term.
How does Fixed-Rate Mortgage work?
Fixed-rate mortgages offer predictable payments. The rate is locked at closing and never changes. Terms: 10-30 years. 30-year has lower payments but more interest; 15-year has higher payments but saves significantly.The most popular home loan type, representing over 80% of purchases. Best for long-term homeowners wanting stability.
Can you give an example of Fixed-Rate Mortgage?
30-year fixed at 6.5% on $350,000 = $2,212/month for 30 years, $446,428 total interest. 15-year at 5.5% = $2,859/month, $164,790 interest. Savings: $281,638.
Free Excel Templates
Also try our free Mortgage Amortization Schedule template
Create a detailed mortgage amortization schedule. See exactly how much principal and interest you pay each month over the loan term.
Download Mortgage Amortization Schedule