Loan Program
Fixed-Rate Mortgages: Stability and Predictability for Your Home Loan
Fixed-rate mortgages offer borrowers a predictable payment structure where the interest rate remains constant for the full term of the loan. Unlike adjustable-rate mortgages, where the rate can change over time, a fixed-rate loan provides certainty: the principal and interest payment you start with is the same payment you make in the final month of the loan.
Quick Answer
A fixed-rate mortgage is a home loan where the interest rate stays the same for the entire life of the loan. This means the principal and interest portion of your monthly payment does not change, regardless of what happens in the broader economy. It is one of the most common mortgage structures available.
Predictability Over Time
How Fixed-Rate Mortgages Work
A fixed-rate mortgage is a loan where the interest rate is set at the beginning and does not change for the life of the loan. The most common terms are 30-year and 15-year fixed-rate mortgages, but other terms may be available. Because the rate is locked in, the principal and interest portion of the monthly payment stays the same from the first payment to the last.
Fixed-rate mortgages can be used across many loan programs. A conventional loan can have a fixed rate, as can an FHA loan, a VA loan, or a jumbo loan. This makes the fixed-rate structure more of a feature of the loan than a standalone program. Borrowers choose a fixed rate when they value payment certainty and want to avoid the possibility of their rate increasing in the future.
The trade-off is that fixed-rate loans typically start with a rate that is higher than the initial rate on an adjustable-rate mortgage. If rates fall in the future, a borrower with a fixed-rate loan would need to refinance to take advantage of the lower rates. Understanding this trade-off is important when deciding between a fixed-rate and an adjustable-rate mortgage.
When It May Make Sense
When predictability matters
Borrowers who may want a consistent monthly principal and interest payment
Homebuyers who plan to stay in their home for many years
Borrowers who may want protection against the possibility of rising interest rates
Homebuyers who value predictability in their monthly housing costs
Fixed vs Adjustable
Fixed-Rate
Rate stays the same for the entire life of the loan.
Principal and interest payment never changes.
Typically starts higher than an ARM's initial rate.
Adjustable-Rate
Rate is fixed for an initial period, then adjusts.
Payment can go up or down after the initial period.
Initial rate is typically lower than a fixed-rate loan.
Tools
Calculators to Help You Plan
Frequently Asked Questions
What is a fixed-rate mortgage?
A fixed-rate mortgage is a home loan where the interest rate stays the same for the entire life of the loan. The principal and interest portion of the monthly payment does not change, regardless of market conditions.
How does a fixed-rate mortgage differ from an ARM?
A fixed-rate mortgage has a rate that stays constant for the life of the loan, while an adjustable-rate mortgage has a rate that can change after an initial fixed period. This means the payment on a fixed-rate loan is predictable, while the payment on an ARM can fluctuate.
What terms are available for fixed-rate mortgages?
The most common terms are 30-year and 15-year fixed-rate mortgages, but other terms may also be available. Shorter terms typically have higher monthly payments but build equity faster, while longer terms have lower monthly payments.
Can I refinance a fixed-rate loan?
Yes, you can refinance a fixed-rate loan. If interest rates have fallen since you obtained your loan, refinancing may allow you to secure a lower rate. Your loan officer can help you evaluate whether refinancing makes sense.
When does a fixed-rate mortgage make sense?
A fixed-rate mortgage may make sense when you value payment predictability, plan to stay in the home for many years, or want protection against the possibility of rising interest rates. Your loan officer can help you compare it to adjustable-rate options.
Related Programs
Explore Other Options
Conventional Loans
Homebuyers seeking a standard mortgage not backed by a government agency
Learn moreAdjustable-Rate Mortgages
Homebuyers who may want an initial fixed period followed by rate adjustments
Learn moreRefinance
Homeowners looking to replace their existing mortgage with a new loan
Learn more