Fixed Rate Loans

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When it comes to borrowing money for a major purchase, such as a home, one popular loan product of choice is a Fixed Rate Loan, which offers stability and predictability over the life of the loan. 

What is a Fixed Rate Loan?

A Fixed Rate Loan is a type of loan where the interest rate remains constant throughout the loan term. This means your monthly payment amount remains the same, providing consistency and allowing you to budget effectively. Fixed Rate Loans are usually come as:

• 30-Year Fixed Rate Mortgage: the most common option, offering a fixed interest rate for 30 years. It provides the lowest monthly payment, spreading the principal and interest payments over a longer period.
• 20-Year Fixed Rate Mortgage: typically offers a lower interest rate than a 30-Year and a shorter loan term than the 15-Year.
• 15-Year Fixed Rate Mortgage: allows borrowers to pay off their mortgage in half the time when compared to a 30-Year loan. While monthly payments are higher, the interest savings over the life of the loan can be significant.
• 10-Year Fixed Rate Mortgage: ideal for those looking to pay their mortgage off quickly and save on interest costs. 

In comparison to Adjustable Rate Mortgages, otherwise known as ARMs, ARMs have a fixed rate for an initial period, typically ranging from 5, 7, or 10 years, after which the rate adjusts periodically based on market conditions. While ARMs may offer lower rates initially, they come with potential rate increases in the future. 

When considering a mortgage, understanding the available options for Fixed Rate Loans can help you choose the one that best suits your financial goals and circumstances.