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 ?
A $15.68 million fixed-rate mortgage for refinancing a 66,500 square-foot multifamily property with 79 units on Washington Street in Hoboken, N.J.
First Direct's decision makes it the latest UK lender to pull back its fixed-rate mortgages from the market.
The shift has been driven by a sharp increase in the cost of fixed-rate mortgages seen during June and July after wholesale funding costs rose.
Moneyfacts said lenders were continuing to fail to pass on falls in swap rates, upon which fixed-rate mortgages are based.
The decision to refinance with an adjustable-or with a fixed-rate mortgage involves many of the same factors considered in the creation of the original home-purchase mortgage.
Andrew Hagger, independent financial expert from website Moneycomms.co.uk, says: "Whether you decide on a variable or fixed-rate mortgage should come down to your own financial situation.
THE Yorkshire Building Society has announced its lowest-ever fixed-rate mortgage deal, which is also the lowest 60% loan-to-value (LTV) rate on the market.
A two-year fixed-rate mortgage at 70% LTV is available at 2.74%.
* A $14.25 million fixed-rate mortgage refinance for an 82-unit multi-family property on Rutgers Street in Manhattan.
Halifax said the highest interest rate it had ever charged on a fixed-rate mortgage was 13.85% in 1990, while the lowest was just 1.99% in February 2007.

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