A mortgage with an interest rate that stays constant throughout the loan term.
A fixed-rate mortgage is a home loan where the interest rate remains constant for the entire loan term (typically 15, 20, or 30 years). Your monthly payment of principal and interest stays the same throughout the loan, making budgeting predictable and protecting you from rate increases. Fixed-rate mortgages are the most common and popular because of this stability and simplicity. The tradeoff: fixed rates are typically higher than the initial rate of adjustable-rate mortgages (ARMs), so you pay more upfront. However, the stability and predictability of fixed rates makes them appropriate for most borrowers. When interest rates are historically low, locking in a fixed rate is especially attractive.