A fixed-rate mortgage is a home loan where your principal and interest payment amounts remain consistent throughout the entire life of the loan—whether you choose a traditional 30-year term or a shorter 15-year term. The monthly principal and interest payment required on your very first mortgage statement remains predictable all the way through your final payment.
Fixed-rate mortgages protect homeowners from fluctuating monthly payments. Plus, with Fairway, you have the flexibility to select a loan duration that matches your financial goals: 10, 15, 20, 25, or 30 years (depending on loan type). Shorter loan terms feature higher monthly principal payments, allowing you to pay off your balance sooner and build home equity faster.
If you plan on remaining in your home for a longer timeframe, a fixed-rate mortgage offers long-term financial stability. Highlights include:
What are the pros and cons of getting a fixed-rate mortgage?
PROS:
Predictability is the biggest advantage. You know your exact monthly principal and interest obligation from day one. You also have the flexibility to make additional principal payments whenever you choose to accelerate your payoff timeline. For example, selecting a 15-year fixed-rate loan allows you to pay off your home in half the time compared to a 30-year term.
CONS:
Your monthly principal and interest payment remains static, meaning it will not automatically decrease if market conditions adjust downward. Additionally, initial payment structures on adjustable-rate mortgages (ARMs) may offer lower initial starting payments during their fixed introductory period.
Is it possible to get a 7-year fixed-rate mortgage?
Fairway offers fixed-rate terms of 10, 15, 20, 25, and 30 years, depending on the specific mortgage program. If you are seeking a shorter timeline, talk with your loan advisor to review custom payoff strategies or bi-weekly payment options.
What is a conforming fixed-rate mortgage loan?
The term “conforming” applies to Conventional mortgages that meet the underwriting guidelines established by Fannie Mae and Freddie Mac. If your fixed-rate loan falls within local FHFA loan limits and meets program guidelines, it is considered a conforming conventional loan.
How does a fixed-rate mortgage compare to an adjustable-rate mortgage (ARM)?
An adjustable-rate mortgage (ARM) features a fixed payment for an initial period (such as 5, 7, or 10 years), after which the monthly payment adjusts periodically based on market indexes.
While an ARM may offer lower initial monthly payments during the introductory period, a fixed-rate mortgage guarantees that your principal and interest payment never changes for the entire lifespan of the loan. Your Fairway mortgage advisor can run side-by-side scenarios to help you decide which structure fits your long-term plans.
Fairway is an equal housing lender. Financial qualifications, minimum credit scores, and program terms apply for all fixed-rate mortgage products.
