When it's best to get a Fixed-rate Loan

A home loan with an interest rate that remains the same throughout the term is known as a fixed rate mortgage. The most popular fixed rate mortgages are 15 and 30 years. Fixed rate loans can either be conventional loans, jumbo loans, or government loans such as FHA and VA.


The payment does not go up after 3, 5, 7 or 10 years like it would with an adjustable-rate mortgage (ARM).
Planning for monthly expenses is easier since payments stays the same.


A fixed interest rate loan is higher than an ARM. If the interest rates on the ARM stays the same or goes down in the future your payment doesn't with a fixed-rate. These are not the ideal choice if you are thinking of selling your home in 5-10 years.

Fixed-Rate Mortgage Types

Many borrowers mistake a rate quote for a &qot;5-year fixed" as a fixed-rate for 30 years. This could become a big mistake since it is actually an ARM. The rate stays the same for the first five years and then changes into an adjustable-rate mortgage for the remaining 25 years. After five years, your interest rate may increase quickly, depending on the national economy.

Be sure to confirm with your loan officer the time period the rate will stay fixed. If the rate is fixed for only 5 years, but the mortgage term is for 30 years, you are likely being quoted for a 5-year Fixed ARM.

15-year fixed rate mortgage
This loan is very appealing because it features interest rates lower than a 30-year fixed. Learn about the benefits and drawbacks of a 15-year mortgage here.

20-year fixed rate mortgage
This mortgage also features lower interest rates than a 30-year fixed. Basically, any loan with a term less than 30 years means the principal balance will be paid off quicker than if you had the typical 30-year loan. Your benefit is you get equity at a faster pace.

30-year fixed mortgage
This loan type remains the country's most popular and affordable loan option. Some reasons why are your monthly house payment is lower and you can still pay more towards the principal any month you feel like doing so. With a 15-year mortgage, you don't have that option. The 30-year fixed is also good for first-time buyers and young families as it makes the monthly house payment affordable over 30 years.

We offer a few 30-year fixed loans with an interest only feature for 10 years, then it converts to a 20-year fixed loan for the remaining 20 years. Underwriters will qualify you based on a 30-year fixed mortgage term, not the interest-only payment.

- YOU pick your term, from 8 to 30 years, all with fixed mortgage rates
- Refinance up to 97% of your primary home's value
- Buy a home with as little as 3% down (primary home)
- Get any loan amount from $100,000 to $726,200

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