Fixed Rate Mortgage

Fixed Rate Mortgage

A fixed rate mortgage is a type of loan in which the interest rate does not fluctuate with general market conditions.

Fixed rate loans tend to have higher original interest rates than flexible rate loans such as an Adjustable Rate Mortgage (ARM), because lenders are not protected against a rise in the cost of money when they make a fixed rate loan. For an individual taking out a loan when rates are low, the fixed rate loan would allow him/her to “lock in” the low rates and not worry about fluctuations.

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