Back to Glossary
A fixed-rate mortgage has an interest rate that stays the same for the entire life of the loan, meaning your monthly principal and interest payments remain constant.
In Depth
With a fixed-rate mortgage, the interest rate you agree to at the beginning of your loan never changes. This provides predictability, as your monthly payment for principal and interest will always be the same, making budgeting easier. It protects you from rising interest rates, but you won't benefit if rates fall unless you refinance. This type of mortgage is popular for its stability and peace of mind.
Example
Many first-time homebuyers choose a 30-year fixed-rate mortgage because they want stable monthly payments.