Fixed Rate Mortgages


Fixed Rate Mortgages

What are fixed rate mortgages


The most common type of mortgage program where your monthly payments for interest and principal never change. Property taxes and homeowners insurance may increase or decrease, but generally your monthly payments will be very stable for the term of the fixed rate mortgage.

Terms of fixed rate mortgages

Fixed rate mortgages are available for 30 years, 20 years, 15 years and even 10 years. There are also “biweekly” mortgages, which shorten the loan by calling for half the monthly payment every two weeks. (Since there are 52 weeks in a year, you make 26 payments, or 13 “months” worth, every year.)

Fixed rate fully amortizing loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15 year and 30 year mortgages.

During the early amortization period, a large percentage of the monthly payment is used for paying the interest. As the loan is paid down, more of the monthly payment is applied to principal. A typical 30 year fixed rate mortgage takes 22.5 years of level payments to pay half of the original loan amount.

Mortgage rates on 15 year fixed rate mortgages

The two most common and popular fixed rate mortgages are 15 year fixed rate mortgages and 30 year fixed rate mortgages.  Homeowners who can afford the 15 rate fixed rate mortgages can get much lower mortgage rates than homeowners who opt for 30 year fixed rate mortgages.  Majority of mortgage loan borrowers choose the 30 year fixed rate mortgages even though they pay much more in mortgage interest expense and get the higher mortgage rates than the 15 year fixed rate mortgages.  Fixed rate mortgages are available for all types of mortgage loan programs.  FHA Loans, VA Loans, USDA Loans, and Jumbo Mortgage all have choices of fixed rate mortgages as well as adjustable rate mortgage loan programs.

Related> 30 year fixed rate mortgages

Related> Fixed Rate Mortgages versus Adjustable Rate Mortgages

Related> 15 year fixed rate versus 30 year fixed rate mortgages

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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