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What is a fixed-rate mortgage?

A fixed-rate mortgage is a loan in which the interest rate stays the same throughout the entire term. Unlike an adjustable-rate mortgage (ARM), the rate is locked in from the start and never changes, allowing borrowers to confidently predict their future payments.

How does a fixed-rate mortgage work?

Fixed-rate mortgages provide a set interest rate, which means your payment stays the same for the entire life of the loan. They are especially popular with first-time homebuyers and anyone who prefers the predictability of a fixed payment for easier budgeting and planning. Fixed-rate mortgage terms can vary, but the most common is 30 years.

What’s the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?

While fixed-rate loans have interest rates that stay the same, ARMs have rates that adjust and change with the market. Some borrowers prefer the predictability of a fixed-rate loan for easier budgeting and planning. Others choose an adjustable-rate mortgage to start with a lower initial payment that increases over time.

Who should get a fixed-rate mortgage?

  • People who want the predictability of a fixed payment should consider a fixed-rate mortgage.
  • For those planning to stay in their home 10 years or more, terms range from 10 to 30 years.
  • Homebuyers with adequate credit are well-suited for a fixed-rate mortgage. Those with lower credit scores may find that an adjustable-rate mortgage offers a lower initial monthly payment.

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