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Fixed Rate Mortgages

This "traditional" type of loan maintains its original interest rate throughout the entire life of the loan. (Any change in monthly loan payments will be due to increases in other charges like insurance or taxes that will naturally occur over time.) Fluctuations in market rates, over the term of your loan, won't have any impact on the amount of interest you pay because that rate is already "fixed." A Fixed Rate Mortgage loan may be a good choice if you:

  • Want the security of knowing your interest rate will not change, nor will your monthly payment, unless property tax and insurance amounts change
  • Plan to stay in this home for several years
  • You don't expect your income to increase significantly in the coming years

Fixed rate Mortgage Loans typically come in 15 or 30-year terms. In determining the length of your loan, you may want to consider:

  • Total amount of interest you want to pay over the course of your loan
    • For example, the total cost of a 30-year loan in terms of the interest paid on the loan is higher than the total cost of a 15-year loan. With a 30-year loan, you have the advantage of lower monthly payments due to the longer loan term.
    • With a 15-year loan, you have the advantage of repaying the loan more quickly with higher monthly loan payments.
  • Your ability to make high monthly payment
    • If you can afford to pay more per month, you reduce the number of months you have to pay. Also, choosing a 15-year term will save you thousands in interest charges vs. the typical 30-year term

Another option to decrease the amount of interest you pay is to get a 30-year loan, so you don't lock yourself into higher monthly payments, but pay a little "extra" each month towards the principal when you are able to do so.

30 Year Rural Housing

Best Choice If:

  • Purchasing a home in a Rural Development designated area.
  • You need fixed monthly payments for the life of the loan.
  • You don't have extra money for a down payment.
  • You prefer fixed payments for the life of your loan.
  • You plan on staying in your home long term.
    Advantages:

  • Consistent monthly payments.
  • Market conditions will not increase your monthly principal and interest payments.
  • No prepayment penalty.
  • Disadvantages:

  • Higher interest rate than other loan options with shorter terms.
  • More interest will be paid over the life of the loan.
  • Shorter term loans typically have lower interest rates.
  • 30 Year Fixed

    Best Choice If:

  • You are a first-time homebuyer, only 3% down is required
  • You plan on staying in the home long-term
  • You think interest rates will increase
  • You don't expect your income to increase significantly over the coming years
  • You need to qualify for the largest loan possible
  • Advantages:

  • Up to 97% loan-to-value for first-time homebuyers
  • Fixed rate of interest
  • Level principal and interest payments for the full term of the loan
  • No risk that changing market conditions will increase your monthly payments
  • Disadvantages:

  • You end up paying more in interest charges over the life of the loan compared to a 15 year loan
  • Interest rate may be higher than an adjustable rate mortgage
  • 25 Year Fixed

    Best Choice If:

  • Flat monthly payments for the duration of the loan.
  • Advantages:

  • Consistent monthly payments.
  • Disadvantages:

  • Higher interest rate than available for some other loan options.
  • 20 Year Fixed

    Best Choice If:

    Flat monthly payments for the duration of the loan.
    Advantages:

    Consistent monthly payments.
    Disadvantages:

    Higher interest rate than available for some other loan options.

    10 Year Fixed

    Best Choice If:

    Flat monthly payments for the duration of the loan.
    Advantages:

    Consistent monthly payments.
    Disadvantages:

    Higher interest rate than available for some other loan options.

    30 Year Fixed with Second Mortgage

    Best Choice If:

  • Down payment as low as 5%
  • You plan on staying in the home long-term
  • You think interest rates will increase
  • You don't expect your income to increase significantly over the coming years
  • You need to qualify for the largest loan possible
  • Advantages:

  • No borrower paid private mortgage insurance (PMI)
  • Fixed rate of interest
  • Level principal and interest payments for the full term of the loan
  • No risk that changing market conditions will increase your monthly payments
  • Disadvantages:

  • Two loans, a first mortgage and a home equity loan or second mortgage
  • Interest rate may be higher than an adjustable rate mortgage
  • 15 Year Fixed with Second Mortgage

    Best Choice If:

  • Down payment as low as 5%
  • You want to own your home more quickly
  • You want to retire debt-free
  • You'll be retiring in less than 30 years
  • You want to stay in your home once you retire
  • Advantages:

  • No borrower paid private mortgage insurance (PMI)
  • Cuts the length of your mortgage in half
  • No borrower paid mortgage insurance
  • Disadvantages:

  • Your monthly payment will be significantly higher than with a 30-year mortgage
  • Two loans, a first mortgage and a home equity loan or second mortgage
  • Home Possible 30 year

    Best Choice If:

    • You have limited funds to invest in a down payment.
    • You earn below the HUD median income limits.
      Advantages:

      • Fixed interest rate.
      • Level principal and interest payments for the full term of the loan.
      • No risk that changing market conditions will increase your monthly payments.
      • Closing costs can come from your own funds, a gift, grant or other permitted sources.
      • Reduced private mortgage insurance (PMI).
        Disadvantages:

        • You pay more interest over the life of the loan due to higher interest rate.

          HomeOne 30 Year

          Best Choice If:

          • You have limited funds to invest in a down payment.
          Advantages:

          • Fixed interest rate.
          • Level principal and interest payments for the full term of the loan.
          • No risk that changing market conditions will increase your monthly payments.
          • Closing costs can come from your own funds, a gift, grant or other permitted sources.
          • No geographic or income restrictions.

          HomeReady 30 Year

          Best Choice If:

          • You have limited funds to invest in a down payment.
          • You earn below the HUD median income limits.
            Advantages:

            • Fixed interest rate.
            • Level principal and interest payments for the full term of the loan.
            • No risk that changing market conditions will increase your monthly payments.
            • Closing costs can come from your own funds, a gift, grant or other permitted sources.
            • Reduced private mortgage insurance (PMI).
              Disadvantages:

              • You pay more interest over the life of the loan due to higher interest rate.

                Mortgage Rates

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