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Fixed-Rate Mortgage
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.