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 ?
The new 15-year fixed rate mortgages are being offered in addition to the eight-year and 10-year fixed rate mortgages.
London: Fixed rate mortgages fell to their lowest levels in 2015, whilst the standard variable rate remained static, meaning the potential savings for borrowers improved significantly over the course of the past two years, according to the latest research from Halifax.
British building society Nationwide on Wednesday reported that it is reducing a selection of fixed rate mortgages across its range by up to 0.45%.
The Bradford-based society was also highly commended for its Longer Term Fixed Rate Mortgages. In addition, it was highly commended in the Best Building Society Savings Provider category and also received a commendation for its fixed rate accounts.
A number of lenders have cut the cost of fixed rate mortgages after economic data has made an imminent rise in interest rates appear less likely.
Barclays, a major global financial services provider, has brought fixed rate mortgages to homebuyers in the UAE.
Summary: Barclays has brought fixed rate mortgages to homebuyers in the UAE.
Barclays' lending arm the Woolwich is also reducing rates on its three-year and five-year fixed rate mortgages for people with a 20 per cent deposit by up to 0.5 per cent.
The biggest change has been seen in two-year fixed rate mortgages, with the number of deals jumping from 250 in April to 405 now.
co.uk, says: "Falling rates on two-year fixed rate mortgages, against a backdrop of lenders raising the maximum loan-to-value on deals, suggests competition is increasing.
The mark up charged on fixed rate mortgages has reached a new high as lenders fail to pass on reductions in their own funding costs.
The average cost of two and five-year, fixed rate mortgages for borrowers with at least a 25 per cent deposit fell for the second month in a row during August - dropping by 0.27 per cent, according to the Bank of England.

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