Having a fixed-rate mortgage means the interest rate on the mortgage loan remains the same (fixed) through the term of the loan. So, the interest rate you have the day you sign for the loan will not change over the loan period.
Fixed-rate mortgages are fully amortized meaning they are fully paid at the end of the loan and there is no balloon payment.
Unlike Adjustable Rate Mortgage (ARM) fixed-rate mortgages are not tied to an index. Instead, the interest rate is set (or "fixed"), usually in increments of 1/4 or 1/8 percent.
One of the benefits of a fixed-rate mortgage is that you will always know your monthly payment amount and the total you will pay over the life of a loan. So, your monthly budget planning, for your mortgage expense, doesn't change from month-to-month. You might prefer fixed rates if you are looking for a loan payment that won't change.
Getting a home loan doesn't have to be daunting. At Catalyst Lending, we make the process streamlined, smart and even fun.
Looking for a mortgage calculator? Try this one.
Or do you want to talk to us to discuss your loan options? Contact us.