Fixed-Rate Loans

 

 
gear location.png

HOW IT WORKS

  • Monthly payments are based on the interest rate, principal loan amount, and amortized interest over a period of time (typically, 15 or 30 years).

  • With a Fixed Rate Mortgage, your interest rate and monthly payments will never change, even if market rates increase.

  • The payment will vary based on your situation and the current interest rates when you apply.

  • You can choose to pay your mortgage off at any time without pre-payment penalties.

Fixed-rate.jpg

 FIXED-RATE LOAN TERMS

Thirty-Year Fixed Rate Mortgage

With a 30-year fixed-rate mortgage, your principal and interest payments don't change. If you plan on staying in your home for seven years or longer, this may be a good choice for you. If you plan to move within seven years, then an adjustable-rate loan may be cheaper.

As a rule of thumb, it may be harder to qualify for a fixed-rate loan than an adjustable-rate loan. However, when interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run since you can lock in the rate for the life of your loan. 

Fifteen-Year Fixed Rate Mortgage

This loan is fully amortized over a 15-year period and also features fixed monthly payments for the term of the loan. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment since the difference in interest rates isn't that great.