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Fixed Rate Mortgage

typical forms of mortgages with fixed rates

The fifteen-year mortgage
You’ll save money on interest. Paying back the loan over a longer time frame will result in paying more interest if you borrow $100,000 to buy a house at a 4% interest rate. Thus, you can pay a lot less interest if you take out a 15-year mortgage. When you combine it with the frequently cheaper interest rates offered by 15-year mortgages, you may be able to save a significant amount of money.

It’s likely that your monthly payment may increase. A 15-year mortgage will likely have a little larger payment despite the lower interest rate. This occurs as a result of your first higher principal payment. But, you will achieve a significant milestone—being mortgage-free in half the time.

The 30-year mortgage
The interest you pay will increase. An extended mortgage entails higher interest rates. Banks and other lenders profit in this way. They provide a loan to you, the borrower, and charge you interest for the fifteen or thirty years that you take to repay them.
It’s likely that your monthly payment will be less. A 30-year mortgage will almost always result in lower payments because they are spread out over a longer period of time. This could be a better option if your monthly budget is restricted.

How it Works

Interest rate, principal loan amount, and amortized interest over a 30-year period are the factors that determine monthly payments. Your interest rate won’t fluctuate with a fixed rate mortgage, even if market rates rise!
Over the course of the loan, your payment will remain the same.
When you apply, the actual amount you pay will depend on your circumstances and the current interest rates.
There are no early payment penalties when you pay off your mortgage at any time.

Have questions? Give us a call! One of our mortgage specialists would be happy to answer all of your questions.

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