With Fixed-Rate Loans, the interest rate and mortgage payments remain fixed for the period of the loan and are structured to pay off the balance at the end of the loan term. They are available for 30, 25, 20, 15 and 10 years with 30 and 15 being most popular. Generally, the shorter the term of a loan, the lower the interest rate. As a result of a shorter loan term, you pay more towards the principle than you would towards interest over a longer fixed loan term. The only difference is that your monthly mortgage payments are substantially greater because the pay-off is being structured over a shorter period of time.
Now is a perfect time to consider a Fixed-Rate Home Loan because you are practically guaranteed a good rate in today’s market as opposed to years past. Although your initial payments may be higher than with an shorter-term loan, you will receive added security of a fixed monthly payment for the life of the loan, regardless of rising interest rates. A Fixed-Rate Mortgage is ideal for anyone who plans to keep their home for several years or likes the piece of mind associated with being able to budget more effectively over a longer term.