• Fixed Rate

  • Fixed Rate Mortgage:
     
    With fixed rate mortgages, the interest rate will not change for the term of the loan; the monthly payment is always the same. Typically, the shorter the loan period is, the more attractive the interest rate will be.
     
    Payments on a fixed-rate fully amortizing loan are calculated so that the loan wil be paid in full at the end of the term. During the early amortization period of the mortgage, a larger percentage of the monthly payment pays the interest on the loan. As the mortgage is paid down, more of the monthly payment is applied toward the principal.
     
    30 year fixed rate mortgage is the most popular type of loan when borrowers are able to lock into a low rate.
     
    Benefits:
    ·         Lower monthly payments than a 15 year fixed rate mortgage
    ·         Interest rates do not go up
    ·         Payment does not go up, it stays the same for 30 years
     
    Drawbacks:
    ·         Higher interest rate than a 15 year fixed rate mortgage
    ·         Interest rate stays the same even if interest rates go down
     
    15 year fixed rate mortgage allows you to pay off your loan quicker and lock into an attractive lower interest rate.
     
    Benefits:
    ·         Lower interest rate
    ·         Build equity faster
    ·         If interest rates go up, yours is fixed
     
    Drawbacks:
    ·         Higher monthly payment stays the same if interest rates go down
    ·         Interest rate stays the same even if interest rates go down