Fixed-Rate Mortgage
With a fixed-rate mortgage, your interest rate and monthly payments stay the same for the entire mortgage term. The downside of a fixed-rate mortgage? They tend to have higher interest rates than Variable-Rate or Adjustable-Rate Mortgages. However, there is a potential upside, if mortgage interest rates go up during the term, you're protected because your rate stays the same.
Typically, the longer the term of the mortgage, the higher the mortgage rate. For instance, a 5-year mortgage will typically have a higher interest rate than a 2-year mortgage.
About The Author
Don Scott
Don Scott is the founder of a challenger mortgage brokerage that is focused on improving access to mortgages. We can eliminate traditional biases and market restrictions through the use of technology to deliver a mortgage experience focused on the customer. Frankly, getting a mortgage doesn't have to be stressful.
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