Fixed Rate Mortgages
Loan Programs
Get StartedA fixed-rate mortgage is the most popular home loan in America, and for good reason. It gives you a payment you can count on for as long as you have the loan. Let's look at how it works and whether it's right for you.
How It Works
With a fixed-rate mortgage, your interest rate is set when you close and never changes. That means your monthly principal and interest payment stays exactly the same from your first payment to your last.
Each payment covers some interest and some principal. Early on, most of the payment goes to interest. Over time, more goes toward paying down your balance. This process is called amortization. You can see it for yourself in our amortization calculator.
One thing to remember: your total monthly payment can still change if your property taxes or homeowners insurance go up, because those are often collected through an escrow account.
Fixed-rate loans are available through nearly every program, from conventional and FHA to VA, USDA and jumbo. That makes them easy to compare. When you shop, look at both the interest rate and the APR, which includes certain fees, so you can see the true cost side by side.
15-Year vs 30-Year
The two most common terms are 15 and 30 years, though 10-, 20- and 25-year terms are also available.
| 15-Year Fixed | 30-Year Fixed | |
|---|---|---|
| Monthly payment | Higher | Lower |
| Total interest paid | Much less | Much more |
| Interest rate | Usually lower | Usually higher |
| Equity building | Fast | Gradual |
| Budget flexibility | Less | More |
A popular strategy is to choose a 30-year loan for the lower required payment, then make extra principal payments when you can. That gives you flexibility in tight months while still saving interest. Try our Extra Payments calculator to see the effect.
To see the difference, imagine a $300,000 loan. The 15-year payment will be noticeably higher each month, but you'll own your home free and clear in half the time and could save well over a hundred thousand dollars in interest, depending on rates. The 30-year payment leaves more room in your budget for savings, investing or other goals. There's no single right answer. It depends on your income, your savings and your long-term plans.
Pros and Cons
Pros:
- Predictable principal and interest payment for the life of the loan
- Protection if market rates rise
- Simple to understand and easy to budget
- Available with most loan programs, including conventional, FHA, VA and USDA
Cons:
- Starting rates are often higher than the introductory rate on an adjustable-rate loan
- If rates fall, you'll need to refinance (and pay closing costs) to benefit
- Early payments build equity slowly on longer terms
Who It Suits
A fixed-rate mortgage is a great fit if you:
- Plan to stay in your home for many years
- Value a stable, predictable budget
- Are buying when rates are reasonable and want to lock in that cost
- Are a first-time buyer who wants to keep things simple
If you expect to move or refinance within a few years, an adjustable-rate mortgage might save money. I'll help you compare both so you can choose based on your plans, not guesswork.
Remember that if rates drop significantly after you close, you're not stuck. Many homeowners refinance their fixed-rate loan into a new one at a lower rate. We'll keep an eye on the market for you and let you know when it makes sense to take a look.