Fixed rate loans have a fixed interest rate and payment for the life of the loan. The most popular fixed rate mortgage
is one with a 30 year repayment period. This provides the borrower with a more affordable monthly payment because the
repayment period is longer. The shorter the loan term, the more the monthly payment will be each month.
Terms available: 30 Yr, 25 Yr, 20 Yr, 15 Yr, and 10 Yr
Payment will never change and is predictable for the life of loan.
Interest rate is guaranteed for the life of loan
No risk of interest rates going up.
Interest rate is higher than an ARM loan.
ARM loans have a fixed interest rate for an initial period and then adjust yearly after the initial lock period has
expired. A 7/1 ARM would have a fixed rate for 7 years and then adjust annually, while a 5/1 ARM would have a fixed rate
for 5 years and then adjust annually. All ARM loans have a 30 year repayment period. ARM loans are a good option if you
know that you will only be in a house for a certain number of years.
Interest rates are usually lower than a fixed rate loan.
Option of how long to have the rate fixed. The shorter the period, the lower the initial rate.
Interest rate may go up in future.
No certainty about what payment will be after the fixed period is over.