Fixed-Rate Mortgages Pros & Cons

Fixed-rate mortgages (FRMs) are very popular with borrowers when mortgage rates are low since they can lock in that rate for the entire duration of their loan. They are simple to understand, and a relative no-brainer when you believe mortgage rates may rise in the future.

Term Length

The most common length of a fixed-rate mortgage is a 30 year term, but 15 year terms are gaining in popularity as we will discuss in the next article, and a 40 year term is usually available if you need smaller payments. The longer the term of the loan, the higher the interest rate will be.

When To Choose A Fixed-Rate Mortgage

If you don't want to worry about your payment amount possibly rising
You are planning to live in the home for a long period of time
When mortgage rates are low

Fixed-Rate Mortgages

Advantages	Disadvantages
When mortgage rates are low, you can lock in that low rate Monthly payments will remain constant with no surprises Very simple to understand so you don't have to worry as much about getting yourself into a bad situation down the road When choosing the length of the mortgage term, it's much easier to figure out the savings and viability of choosing a shorter term	If rates go down you will be stuck paying at the higher rate unless you decide to refinance which can cost you a couple thousand dollars. While fixed-rate mortgages are pretty much the same from different lenders, you can usually find different variations of adjustable-rate mortgages that may benefit you in certain situations

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