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How Fixed-Rate Mortgages Work
The two most common types of mortgages are fixed-rate and adjustable rate. Fixed-rate mortgages charge a set rate of interest that doesn't change during the life of your loan. How does this affect the way the loan works?
The amount of principal and interest paid on the loan varies, but the total payment each month remains the same.
The fixed rate makes it easy to budget and provides increased financial security.
Buyers who purchase their home in a high-interest economy may be stuck paying a high rate of interest unless they refinance.
All of these statements are true. Fixed-rate mortgages are often considered safer than adjustable-rate mortgages.