Is a Fixed Rate Mortgage Loan Best Option?

Defining the Fixed Rate Mortgage Loan

Fixed rate home loans are those in which the interest rate remains the same for the entire term of the mortgage. A fixed interest rate mortgage works well for those who are buying a new home or refinancing an existing one during a period of time when interest rates are low, and you have the ability to lock in that low rate. Another thing to keep in mind is even though the amount of principal and interest the lender applies to your loan varies every month, the total payment doesn’t change which makes a long term fixed rate mortgage easy to fit into the monthly budget. Those borrowers who prefer fixed mortgage rates do so because it is much easier to manage their budgets even on an annual basis.

Features of a Fixed Rate Mortgage

  • The monthly payments and interest rate remain the same through the life of a fixed rate mortgage loan
  • Fixed rate mortgages have several different options for loan terms
  • Depending on the lender it may be possible to add extra features such as interest only payments or temporary buy downs

Learn the Advantages of Fixed Rate Loans from

Although fixed rate loans may cost more in the early years of home ownership, the long-term advantages are numerous. The following five points are among the numerous advantages you can learn from the Real-Estate-Yogi website:

  • When you compare a fixed rate loan to an Adjustable Rate Mortgage it is simple and easy to understand. There is no need to concern yourself about adjustments in the interest rate, rate cap or the effect the financial index will have on your rate among other things. Fixed mortgage rates never change, so these complex factors are of no importance to the cost of your loan.
  • A fixed rate loan is appropriate for first time homebuyers who are concerned about knowing how much they need to budget every month for mortgage payments.
  • Those who plan to keep their homes for a long time or desire to know their monthly expenses will be well-suited to cheap fixed rate mortgages.o
  • The interest rate on fixed rate mortgages never changes, so even if other expenses go up because of inflation, you will pay the same in principal and interest—the only way your mortgage payments will increase is because of taxes and insurance.
  • If you have the lowest fixed rate mortgage you can make it work in your favor by prepaying the principal on your mortgage. This will provide you with a higher return than you can earn by investing the money in a savings account or CD.

Is a Fixed Rate Mortgage Right for You?

Should you consider the best fixed rate mortgage? This depends on your individual circumstances, but the following will help provide some guidance and lead you in the right direction:

  • Current fixed mortgage rates are low
  • You can afford the payment for your “dream” home
  • It is important for you to know how much your monthly expenses will be on a regular basis
  • You plan to stay in your home for quite a few years can help you make the right decision about whether you should choose a fixed rate mortgage.

Let Real-Estate-Yogi Help You Choose the Lowest Fixed Rate Mortgage

Another option for mortgages includes low fixed rate mortgages. You can even choose a mortgage with a five or ten year closed rate with 25 year amortization. You can then pay off your mortgage faster and save interest. This type of mortgage may be right for you if you fall into one of more of the following categories:

  • You want a mortgage with a great rate that is simple and easy to understand
  • You have a desire to be free of a mortgage payment within twenty-five years
  • Your peace of mind depends on your not having to worry about an increase in your interest rate
  • You need to budget your mortgage payments with certainty


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