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Fixed Rate Mortgages

The most common type of mortgage program is that in which the monthly payments for interest and principal never change. Property taxes and homeowner's insurance may cause payments to increase, but generally your monthly payments will be very stable. Fixed rate mortgages are available for a variety of loan terms.

Fixed rates fully amortizing loans have two distinct features. First, the interest rate remains fixed for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term. The most common fixed rate loans are 15 year and 30 year mortgages. During the early amortization period, a large percentage of the monthly payment is used for paying the interest. As the loan is paid down, more of the monthly payment is applied to principal. A typical 30-year fixed rate mortgage takes 22.5 years of level payments to pay half of the original loan amount.