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 cost of a five-year fixed-rate mortgage is now about 6.
19pc, with interest on a five year fixed-rate mortgage rising from 4.
A fixed-rate mortgage remains a very attractive deal and is probably best for anybody who intends to stay put for about seven years.
This really benefits borrowers who paid into the loan for a short time and want the amenities that refinancing brings but can't afford the higher monthly payments of refinancing from a 30-year, fixed-rate mortgage to a 15-year, fixed-rate mortgage.
In terms of loan preferences, The Manhattan Mortgage Company survey reported that 34 percent of co-op/condominium borrowers chose five-year adjustable rate mortgages in November, while 30-year fixed-rate mortgages accounted for 26 percent of the marketplace.
According to its most recent 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 leading adjustable rate mortgages.
According to its January report, which is based on data from over 30 major lending institutions, all serving the New York residential marketplace, two of the three most popular fixed-rate mortgage products ended lower, while two of the four leading adjustable rate loans climbed higher.

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