Fixed Rate Mortgage

As the name implies, a fixed-rate mortgage has an interest rate that remains the same for the life of the loan. A fixed-rate mortgage is the most popular type of financing because it offers predictability and stability to the borrower as there aren’t any negative surprises in the future.

Fixed rate mortgages tend to have higher interest rates than adjustable-rate-mortgages, or ARMs, at inception because the borrower is paying for protection from any interest rate increases.

This type of mortgage is structured, or “amortized” so that it will be completely paid off by the end of the loan term.