Fixed Rate Mortgages

The basic type of mortgage is the Fixed-Rate Mortgage. Your monthly payment is the same every month for the entire length of the loan. Fixed loan amounts usually carry higher rates of interest than other types of mortgages, but they offer the security and piece of mind your monthly payment and interest rate will not change.

Advantages

• Rates remain the same for the life of the loan

Disadvantages

• Fixed rate mortgages have a higher interest rate. Lenders are assuming a risk because if market rates go up you'll be locked in at a lower rate and they could lose money.
• They are more difficult to obtain than other types of loans because of the risk assumed by the lender.
• Loan amounts are typically smaller than other types of loans.

Common Fixed-Rate Mortgages

The 30-Year Fixed-Rate Mortgage
This type of loan allows you to borrow more money for the same monthly payment than shorter term loans. It may also be possible to have both a lower down payment and monthly payment.

The 15-Year Fixed-Rate Mortgage
This loan is better for lower-priced homes. They require a higher down payment and monthly payment, but the term of the loan is half as long as a 30 year. This will provide you with significant savings and lower your total cost of ownership (TCO) on the total amount of interest paid loan.