Fixed Rate Mortgages

One of the many types of home loans offered to borrowers is called a fixed rate mortgage. Unlike an adjustable rate mortgage the monthly payments for a fixed rate mortgage stay stable.

In a FRM, the interest rates, and hence monthly payment, remains fixed for the life (or term) of the loan. The term is usually for 10, 15, 20, or 30 years (15 and 30 being the most common). However recently lenders have introduced terms that are amoritized over 40 and 50 year terms. The only increase a consumer might see in their monthly payments would result from an increase in their property taxes or insurance rates (paid using an escrow account, if they’ve opted to use an escrow). But payments for principal and interest will be consistent throughout the life of the loan using an FRM.