Fixed Rate Mortgage

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A mortgage in which the interest rate is fixed for the life of the loan.  The most common of these loans is the 30 year fixed rate mortgage, which will have a fixed interest rate for the entire 30 year life of the loan.  This is a conservative choice as it allows you to create a financial plan with accurate mortgage expenses for a longer period of time than an ARM.  It also provides peace of mind in knowing that your loan will not have any fluctuations in interest rate and payment for the life of the loan.

Evolution in the mortgage industry, and the increasing home prices in the recent years have created the need for fixed rate loans with longer life spans, such as the 40 year fixed loan and the 50 year fixed rate loan.  These 2 loans, in addition to having a fixed rate for the life of the loan, have longer repayment periods which therefore decrease the monthly payments which can allow buyers to purchase a more expensive home while keeping your monthly payment at a comfortable figure.  It may also allow current home-owners to convert their 30 year loans into a longer term loan, which may provide them with the ability to take cash-out or consolidate debts, while keeping their payments lower than with another 30 year term.