Fixed-rate mortgages

What is a fixed-rate mortgage?

A fixed-rate mortgage loan is a loan where the interest rate remains the same for the entire term of the loan. Interest rates on fixed-rate mortgages are locked up-front and don’t change, as opposed to an adjustable-rate mortgage (ARM). This allows a borrower to accurately predict their future payments.

How does a fixed-rate mortgage work?

Fixed-rate mortgages offer a set interest rate, resulting in a fixed payment amount that will not change over the life of the loan. It’s particularly popular with first-time homebuyers and anyone who finds it easier to budget and plan around the predictability of a fixed payment. Fixed-rate mortgage lengths vary, but the most common term is 30 years.

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What’s the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?

While fixed-rate loan have interest rates that stay fixed, ARMs have interest rates that adjust and vary based on the market. For some, the predictability of a fixed-rate loan is better for budgeting and planning their future. Others who choose an adjustable-rate mortgage prefer to start with a lower up-front payment and then increase periodically.

What types of fixed-rate mortgage are there?

  • A wide range of conventional and government (FHA, VA & USDA) loan options available
  • Up to 100% financing for purchase loans
  • Customized options for refinance without re-extending loan terms

Who should get a fixed-rate mortgage?

  • People seeking the predictability of a fixed payment should consider a fixed-rate mortgage
  • Anyone planning to keep their home for 10 years or more. Terms range from 10-30 years
  • Homebuyers with adequate credit. If you have lower credit scores, you may find an adjustable-rate mortgage offers a lower initial monthly payment than a fixed rate mortgage

All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.

Wondering how you can afford to buy a home? Try our cash-to-close calculator.