Fixed-Rate Mortgage

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Fixed-Rate Mortgage

A mortgage on real estate with an interest rate that does not change over the life of the loan. As a result, payments on a fixed-rate mortgage do not change. This carries the least risk for the borrower, but it can make it more difficult to qualify for a mortgage in the first place. See also: Adjustable-rate mortgage.

Fixed-rate mortgage.

A fixed-rate mortgage is a long-term loan that you use to finance a real estate purchase, typically a home.

Your borrowing costs and monthly payments remain the same for the term of the loan, no matter what happens to market interest rates.

This predetermined expense is one of a fixed-rate loan's most attractive features, since you always know exactly what your mortgage will cost you.

If interest rates rise, a fixed-rate mortgage works in your favor. But if market rates drop, you have to refinance to get a lower rate and reduce your mortgage costs.

Typical terms for a fixed-rate mortgage are 15, 20, or 30 years, though you may be able to arrange a different length. With a hybrid mortgage, which begins as a fixed-rate loan and converts to an adjustable rate, the fixed-term portion is often seven or ten years.

fixed-rate mortgage

See fixed-rate loan.

Fixed-Rate Mortgage (FRM)

A mortgage on which the interest rate and the monthly mortgage payment remain unchanged throughout the life of the mortgage.

References in periodicals archive ?
Nationwide Building Society has a two-year fixed rate mortgage of 5.
For example, a $300,000 40-year fixed rate mortgage compared with a five-year adjustable rate mortgage could reduce a monthly payment by nearly $60.
Meanwhile interest on a new two-year fixed rate mortgage with Abbey National has already gone up from 3.
With a resurgence in the demand for fixed rate mortgage products including new mortgages and mortgage refinancings, the MMA has been a popular choice.
Short Term Fixed Rate Abbey has a fixed rate mortgage of 6.
Approximately 25% of the mortgage loans are fixed rate mortgage loans and 75% are adjustable-rate mortgage loans.
As treasury yields went up, interest in the 15-year fixed rate mortgage declined," says Bitton.
Approximately 26% of the mortgage loans are fixed rate mortgage loans and 74% are adjustable-rate mortgage loans.
Anyone with an interest rate that is six percent or higher on a fixed rate mortgage should consider refinancing," said Walters.
This will require you to aggressively shop around for a mortgage rate you can live with, Remember, fixed rate mortgages will carry higher interest rates than adjustable rate mortgages.
In terms of loan preferences, The Manhattan Mortgage Company survey reported that 32% of co-op/condominium borrowers chose five-year adjustable rate mortgages in February while 30-year fixed rate mortgages accounted for 38% of the marketplace.
Long-term fixed rate mortgages have also seen a rise in popularity.

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