Fixed-Rate Loans
A fixed-rate loan offers the same interest rate, monthly principal and interest payment throughout the entire life of the loan. The fixed-rate mortgage loan is the "traditional" choice and is still the most popular because it offers stability and predictable monthly payments.
The longer the term, the lower the monthly payments and the more cash you'll have for other expenses. A longer term also provides maximum tax-deductible interest (ask your tax advisor for more details). With a shorter term, you'll have higher monthly payments and you'll qualify for a smaller loan amount, but you'll save on interest costs over the life of the loan and build your equity faster.
Choose a fixed-rate loan if you:
- Like the current rate and want to keep it for the life of your loan
- Are purchasing or refinancing at a time when interest rates are comparatively low
- Plan to stay in your house for a long time
- Prefer regular payments with no surprises
- Are on a limited or fixed income
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