Traditional Products

With a fixed-rate loan, the monthly payment of principal and interest never changes for the life of the loan. Your property taxes may go up if the value of the property increases, which may also affect the cost of your homeowner’s insurance premium. Many homeowners choose a fixed-rate loan for the long-term stability it provides.

Fixed-rate loans are available for both short and long periods of time: 30-year,20-year, 15-year, and sometimes 10-year. Some fixed-rate mortgages are structured as”biweekly” mortgages that shorten the life of your loan. Payments are due every two weeks, a total of26 payments a year — which adds up to an “extra” monthly payment every year.

During the early amortization period of a fixed-rate loan, a large percentage of the monthly payment goes towards the interest, and a much smaller part towards the principal. That gradually reverses itself as the loan ages.

You might want to consider a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed-rate loan can give you more monthly payment stability.