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.
Interest rates on 30-year fixed-rate mortgages have not risen above 6 percent in at least six months, which has helped to keep the housing market bustling, said Frank Nothaft, Freddie Mac's vice president and chief economist.
Homeowners are set to pay more for new fixed-rate mortgages despite the Bank of England's recent decision to keep interest rates on hold at a 48-year low.
In the fixed-rate category, 15-year fixed-rate mortgages slipped to 6.
At this time last year, our forecast called for interest rates for 30-year fixed-rate mortgages to exceed 6 percent by this time this year,'' he said in releasing the company's latest survey during the middle of last week.
For 15-year fixed-rate mortgages, a popular option for refinancing, rates rose to 5 percent, up from 4.
The average interest rate on 30-year fixed-rate mortgages dropped to 5.
The report shows that in the third quarter of 1999, 45 percent of the loans were fixed-rate mortgages and 55 percent were adjustable.

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