A fixed rate loan is the most typical mortgage loans sold today.  With true fixed rate loans the interest rate on the mortgage stays consistent throughout the duration of the loan.  The mortgage on a fixed rate loan does not change during the life of the loan.  Fixed rate loans amortize over the duration of the the loan term.  The shorter the loan term the higher the payment will be, as you are eliminating the principle balance over a shorter period of time.  The interest rate generally speaking will be lower for shorter term loans, and you will gain equity in the property quicker.

Typical terms for fixed rate loans are 10,15, 20, and 30 years.  40 Year fixed rate loans are becoming more popular but most of them have a baloon payment after 30 years if there is still a balance remaining.

Fixed Rate Loans

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