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 ?
uk Lenders raised the cost of their fixed-rate mortgage deals in response to steep increases in swap rates, upon which fixed-rate mortgages are based, due to speculation that interest rates could rise because of inflationary pressures.
Jennifer Holloway, head of media relations at Skipton, said: 'Getting a fixed-rate mortgage offers peace of mind.
29pc, while that on a new five-year fixed-rate mortgage has risen from 3.
In the fixed-rate category, 15-year fixed-rate mortgages slipped to 6.
The Group II mortgage pool consists of first and second lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $279,009,079.
The average 30-year fixed-rate mortgage remains well below the low watermark for the 1990s.
Though some California banks have included prepayment clauses with rate discounts on adjustable-rate mortgages for several years, virtually no major lenders in the country routinely have marketed them with fixed-rate mortgages.
The lower interest rates and lower monthly payments available with short- term mortgages allow the prospective homeowner to qualify for a mortgage more easily or even to qualify to borrow more money than they could with a long-term, higher-priced, fixed-rate mortgage.
The Group II mortgage pool consists of first lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $151,850,026.
According to its December report, which is based on data from over 30 major lending institutions, all serving the New York residential marketplace, the two most popular fixed-rate mortgage products rose during the month, as did all five of the leading adjustable rate mortgages.
The trust will contain fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an approximate aggregate principal balance of $874,852,151.

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