Fixed Rate versus Adjustable Rate � The Fixed Rate Loan

With a fixed rate loan, your monthly payment of principal and interest never change for the life of your loan. Your property taxes may go up, as might your homeowner’s insurance premium, but the actual mortgage itself stays the same. So generally, with a fixed rate versus adjustable rate, you can expect a very stable payment.

Fixed-rate loans are available in all sorts of shapes and sizes � 30-year, 20-year, 15-year or even 10-year durations. Some fixed rate mortgages are called “biweekly” mortgages and shorten the life of your loan. You pay every two weeks, a total of 26 payments a year, which adds up to an “extra” monthly payment every year.

During the early amortization period of a fixed rate loan, a large percentage of your monthly payment goes toward interest and a much smaller part toward principal. That gradually reverses itself as the loan ages.

You might choose a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed rate loan can give you more monthly payment stability.

Give us a call at 1-888-848-1880 to discuss if a fixed rate or adjustable rate mortgage is best for you. If you want more information about Adjustable Rate Mortgages, click here.

M2 Lending Solutions 2000 S Colorado Blvd, Tower One Suite 1-3400 Denver, CO 80222