DayCents

Fixed-Rate Mortgage

A fixed-rate mortgage keeps the same interest rate — and the same principal-and-interest payment — for the entire loan, typically 15 or 30 years. It trades a slightly higher starting rate than an ARM for total predictability, the reason it's the most popular U.S. home loan.

A 30-year fixed keeps payments low and steady; a 15-year fixed carries a lower rate and builds equity far faster but with a higher monthly payment. Only taxes and insurance can change a fixed-rate payment over time, not the rate itself.