WE’RE HERE TO HELP YOU

Get a Fixed Rate Loan

A fixed rate mortgage is a type of home loan where the interest rate remains the same throughout the entire life of the loan. This means that the borrower’s monthly payment stays the same, regardless of changes in market interest rates.

Make appointment
Get a quote

What is a Fixed Rate Loan?

A Fixed-Rate Mortgage is a fundamental concept in the world of home loans, providing a straightforward, predictable method of financing a home. In essence, a fixed-rate mortgage is a loan for which the interest rate stays the same for the entire term of the loan, typically 15 or 30 years. This contrasts with adjustable-rate mortgages, where the interest rate can fluctuate over time.

Let’s dive into this concept using an example. Suppose you secure a 30-year fixed-rate mortgage for a $200,000 house at a 4% interest rate. This means that the interest rate of 4% will remain constant throughout the 30-year term of your loan, irrespective of market changes. This consistency allows your monthly mortgage payments to stay the same over the life of the loan, providing stability and predictability for your budgeting.

This stability is one of the major attractions of a fixed-rate mortgage. It simplifies budget planning as your mortgage payment won’t change over the years. This is especially beneficial if you’re planning to stay in your home for a long period of time.

However, fixed-rate mortgages often start with higher interest rates than adjustable-rate mortgages. In the above example, while the 4% rate is locked in, an adjustable-rate mortgage might offer a lower initial rate, for example, 3%. But remember, the key word is ‘initial’. While the fixed rate stays the same, the adjustable rate can go up or down, meaning it could end up being higher than the fixed rate.

Choosing between a fixed-rate mortgage and an adjustable-rate mortgage is an important decision that should be based on your financial situation, how long you plan to own the home, and your risk tolerance. It’s always recommended to consult with a mortgage or financial professional to help you understand which type of loan is most suitable for your circumstances.

Get quote

FAQs

Got a question? We’re here to help.
With a fixed rate mortgage, the interest rate is determined when the loan is originated and remains the same throughout the life of the loan. The borrower’s monthly payment stays the same, making budgeting and financial planning easier.
Fixed rate mortgages offer stability and predictability. With a fixed rate mortgage, borrowers know exactly how much they will be paying each month for the life of the loan, making budgeting and financial planning easier. Additionally, because the interest rate is fixed, borrowers are protected from rising interest rates, which can be a concern with variable rate mortgages.
The term of a fixed rate mortgage is typically 15 or 30 years, although other terms may be available.
The interest rate on a fixed rate mortgage is determined at the time the loan is originated and does not change, even if market interest rates go up or down.
Fixed rate mortgages have a set interest rate for the life of the loan, while adjustable rate mortgages have an interest rate that can change over time based on market conditions.
One potential drawback of a fixed rate mortgage is that it may come with higher interest rates than adjustable rate mortgages (ARMs), especially when market interest rates are low. Additionally, if interest rates decrease significantly over time, borrowers with fixed rate mortgages may miss out on potential savings.
Yes, you can refinance a fixed rate mortgage. Depending on the current market interest rates and your financial situation, refinancing your fixed rate mortgage could potentially lower your monthly payment or shorten the term of your loan.