Fixed-Rate Mortgage (FRM)
A mortgage interest that is fixed throughout the entire term of the loan.
Thirty-Year Fixed Rate Mortgage
The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan on living in the same home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. Often times, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally only slightly more expensive than adjustable-rate mortgages. Fixed-rate loans may be a better deal in the long run, as you can lock in the rate for the life of your loan.
Fifteen-Year Fixed Rate Mortgage
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.
Other Fixed Rate Mortgages
Some lenders offer a 20-year or a 10-year fixed rate mortgage. These options are not always available, but when they are can serve as an alternative from the traditional 30-year or 15-year fixed mortgages.