Fixed-Rate Mortgage — Financial Glossary
Definition: A mortgage with an interest rate that stays the same for the entire term of the loan.
What is a fixed-rate mortgage?
A fixed-rate mortgage is a home loan where the interest rate remains constant throughout the entire loan term — typically 15 or 30 years. Your monthly principal and interest payment never changes.
Fixed vs. Adjustable Rate
| Feature | Fixed-Rate | Adjustable-Rate (ARM) |
|---|---|---|
| Rate changes? | Never | Yes, after initial period |
| Payment predictability | High | Low after adjustment |
| Initial rate | Usually higher | Usually lower |
| Best for | Long-term homeowners | Short-term or expecting rate drops |