Fixed Rate Mortgage

Fixed Rate Mortgage

The term "fixed-rate mortgage" refers to a home loan that has a fixed interest rate for the entire term of the loan. This means the mortgage carries a constant interest rate from beginning to end.

← Back to Home Mortgage Types

Is a fixed rate mortgage a good idea?


The best ​thing​ about ​fixed rate​ mortgages is that your ​interest rate​ - and therefore your monthly repayment - stays the same throughout the agreed term.

Advantage


  • The main advantage of a fixed-rate loan is that the borrower is protected from sudden and potentially significant increases in monthly mortgage payments if interest rates rise. Fixed-rate mortgages are easy to understand and vary little from lender to lender.

What does a fixed mortgage rate mean?

The term Fixed Rate Mortgage refers to a home loan that has a fixed interest rate for the entire term of the loan. This means the mortgage carries a constant interest rate from beginning to end.

How a Fixed-Rate Mortgage Works

Each month's payment is equal to the interest rate times the principal, plus a small percentage of the principal itself. Since a bit of the principal is paid off each month, that makes the interest payment on the remaining principal a little less too. As a result, more of your monthly payment goes toward the principal each month.

 

In other words, most of the monthly payment goes toward interest at the beginning of the loan. Toward the end, most of it goes toward the principal.

Pre-Qualify For Free

List of services

Share by: