Fixed Rate Mortgage
Fixed-rate mortgage rates are still low! People often purchase a home to remain there for many years. Having a consistent payment that doesn’t change secures your financial future. It’s easier to plan your budget when you can rely on a steady mortgage payment with the lowest rates throughout the loan terms.
Common Fixed-Rate Mortgages
A 15-year mortgage requires less interest. Borrowing $100,000 with a 4% interest rate for a longer period equals more interest paid. Paying that loan over 15 years reduces the interest owed. Many 15-year mortgages offer lower interest rates than longer ones, adding more savings.
Monthly payments for a 15-year mortgage are often higher, despite the lower interest rates. However, more of your payment goes toward the principal, allowing you to pay off your mortgage in half the time of longer loans.
A 30-year mortgage requires more interest, which is how most banks make money. You borrow their funds, and they collect interest over the loan terms, whether you choose a 15 or 30-year mortgage.
Many homeowners choose a 30-year mortgage because payments are lower. Paying the balance is spread over a more extended period, making these mortgages ideal for individuals with a tighter budget.
How it Works
- Your monthly mortgage payments are calculated based on the interest rate, principal amount, and amortized interest over the duration. A fixed-rate mortgage provides a fixed interest rate that never changes, regardless of the market rate.
- Your payment won’t vary.
- Your payment will reflect your situation and the interest rate at the time of your application.
- You can pay off your entire balance at any time with no penalties.
If you have questions about fixed-rate mortgages, call our mortgage specialists to get the answers you seek.