how a fixed rate mortgage works
several kinds of mortgage products are available on the market but they boil down to two basic categories variable rate loans and fixed rate loans with variable rate loans the interest rate is set above a certain benchmark it then fluctuates which means it changes at certain periods fixed rate mortgages carry the same interest rate throughout the entire length of the loan unlike variable and adjustable rate mortgages fixed rate mortgages don t fluctuate with the market so the interest rate in a fixed rate mortgage stays the same regardless of where interest rates go up or down most mortgagors who purchase a home for the long term end up locking in an interest rate with a fixed rate mortgage they prefer these mortgage products because they re more predictable in short borrowers know how much they ll be expected to pay each month so there are no surprises the mortgage term is basically the life span of the loan that is how long you have to make payments on it in the united states terms can range anywhere from 10 to 30 years for fixed rate mortgages 10 15 20 and 30 years are the usual increments of all the term options the most popular is 30 years followed by 15 years an open fixed rate mortgage allows borrowers to pay down the principal balance before the loan s maturity date without any additional fees and charges borrowers must pay additional fees if they pay off a closed mortgage before it matures 