FIXED RATE MORTGAGES

Fixed rate mortgages are most common type of mortgage programs where your monthly payments never change. Property taxes and homeowners insurance may increase, but generally you monthly payments will be very stable.

Fixed rate mortgages are available in various increments. 30 year mortgages are the most common, but due to the lower interest rates available today, 20 year, 15 year and even 10 year rates are more attainable.

Fixed rates fully amortizing loans have two distinct features. First, the interest rate remains the the same for the life of the loan. Secondly, the payments remain level for the life of the loan and are structured to repay the loan at the end of the loan term.

During the early amortization period, a large percentage of the monthly payment is used for paying the interest. As a loan is paid down, more of ther monthly payment is applied to the principle. A typical 30 year fixed rate mortgage takes 22.5 years of level payment to pay half of the original loan amount.