What does "Fixed-rate mortgage" mean?

Definition

A fixed-rate mortgage is a home loan where the interest rate remains the same for the entire life of the loan. This provides predictable and stable monthly payments.

Understanding Fixed-Rate Mortgages

A fixed-rate mortgage is often discussed during the loan selection phase. It offers predictable monthly payments over the life of the loan. For instance, if you have a 30-year fixed-rate mortgage at 3%, your interest rate won't change, and you'll know exactly what to pay each month. Example: A $200,000 mortgage at 3% means roughly $843 a month for principal and interest. It's not tied to market fluctuations; the rate remains steady regardless of economic changes. Some think it adjusts like other loan types, but a fixed-rate mortgage keeps its original interest rate throughout the loan term.

People Want To Know

What is a fixed mortgage rate right now?

Fixed mortgage rates fluctuate based on market conditions and factors such as credit score, loan amount, and down payment size. For the most accurate and current rates, contact lenders directly.

How much is a 30-year fixed interest rate right now?

The average 30-year fixed mortgage interest rate varies based on the borrower's credit score, down payment, and current market conditions. Contact lenders for current rates.

Will mortgage rates ever be 3% again?

Mortgage rates could potentially return to 3%, but whether and when this happens depends on economic conditions, inflation rates, and Federal Reserve policies. Historical data shows that rates fluctuate significantly over time based on these factors.

What is the monthly payment on a $500,000 loan at 7%?

The monthly payment on a $500,000 loan at a 7% interest rate for 30 years is approximately $3,327. This calculation is based on the fixed-rate mortgage formula, which includes principal and interest payments.

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More From The Mortgage Glossary

Floating rate

A floating rate is an interest rate that changes over time based on market conditions. This is another name for a variable or adjustable-rate mortgage.

Forbearance

Mortgage forbearance is a temporary pause or reduction in your mortgage payments. It can provide relief during financial hardship, but the missed payments must be repaid later.

Force-placed insurance

Force-placed insurance is an insurance policy a lender buys for your home if your homeowners insurance lapses. This insurance protects the lender's interest, but it is typically more expensive than what you could get yourself.