Fixed Rate Mortgages

With a fixed rate mortgage, your monthly payments for interest and principle will remain constant throughout the life of the mortgage. While property taxes and homeowners insurance may contribute some variation to your monthly payments, a fixed rate mortgage generally provides a great deal of stability. This is probably the main reason that fixed rate mortgages are the most common mortgage program.

You can get fixed rate mortgages for periods of 30 years, 20 years, 15 years, or in some cases even ten years. Biweekly mortgages can also shorten the period by requiring half the monthly mortgage every two weeks (this adds a theoretical ımonthı to each year, since there are 52 weeks in a year, meaning that each year you would pay 13 monthly payments).

Also available, and falling into the same category as fixed rate mortgages, are fixed rate fully amortizing loans. These loans have a fixed interest rate and level payments throughout the life of the loan, and are designed to repay the loan at the end of the loanıs term. The most common time period for these loans is either 30 years or 15 years. During the early period of the loan, called the amortization period, a large portion of the payment is used to pay off the interest on the loan. As the loan goes on, more and more of each monthly payment is applied toward the principle. For example, if you had a typical 30 year fixed rate fully amortizing loan, you would have paid about half of the principal after 22.5 years.

Fixed rate mortgages allow you to be sure that your payments will stay steady throughout the life of your loan. Most people prefer the certainty of a fixed rate mortgage to the unknowns associated with other mortgage types.