The fixed-rate mortgage is the most common mortgage program in the industry. It is the easiest to understand and provides the security and peace of mind of a set monthly payment (principal and interest) that will remain the same throughout the term of the loan.
- The most common term (length or duration of the loan) is 30 years
- Other common terms (length or duration of the loan) are 25, 20, 15, 10 years
- A fixed-rate mortgage offers a straightforward, predictable monthly payment. With fixed-rate mortgages, your interest rate—and your total monthly payment of principal and interest—will stay the same for the entire term of the loan. That predictability makes it easier to set your budget.
- No prepayment penalty. You may pay some or all of your loan balance in advance without a penalty.