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Fixed Rate Loan

   Also found in: Acronyms 0.01 sec.
Fixed Rate Loan
A loan with an interest rate that does not change over the life of the loan. For example, if one borrows money at a fixed interest rate of 10%, then 10% is amortized over the maturity of the loan and thus payments never change. A fixed interest rate differs from a variable interest rate, which may change, at least within certain parameters. Most home mortgages in the United States are fixed rate loans.


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ve seen they adjusted up, way beyond the rates of a fixed rate loan for the same amount.
Likewise, the fee to set up a fixed-rate option is only $50, although the first one is free and there is no fee if a borrower is moving a fixed rate loan amount back to the variable line of credit.
Fixed Rate Loans: Disadvantages One disadvantage of fixed rate loan is that if the interest rate significantly decreases during the period of the mortgage loan, then the borrower will be on a serious disadvantage financially.
 
 
 
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