A
fixed-rate loan offers the same
interest rate, monthly principal and
interest payment throughout the entire life
of the loan. The
fixed-rate mortgage
loan is the "traditional" choice and is
still the most popular because it offers
stability and predictable monthly payments.
The longer the term, the lower the
monthly payments and the more cash you'll
have for other expenses. A longer term also
provides maximum tax-deductible interest
(ask your tax advisor for more details).
With a shorter term, you'll have higher
monthly payments and you'll qualify for a
smaller loan amount, but you'll save on
interest costs over the life of the loan and
build your equity faster.
Consider a fixed-rate loan if you:
- Like the current rate and want to
keep it for the life of your loan
- Are purchasing or refinancing at a
time when interest rates are
comparatively low
- Plan to stay in your house for a
long time
- Prefer regular payments with no
surprises
- Are on a limited or fixed income