Fixed Rate Loan
What Is a Fixed Rate Mortgage?
A fixed rate mortgage is a mortgage loan that has a set interest rate for the entire life of the loan. It does not fluctuate with market changes and can only be altered through a refinance. Fixed rate mortgages are typically slightly higher than adjustable rate mortgages because they offer consistency and protection from inflation.
In most of the U.S., the 2023 maximum conforming loan limit (CLL) for one-unit properties will be $726,200.
Fixed Rate Mortgage Qualifications
Eligibility for a fixed rate mortgage depends on your debt-to-income ratio, credit score, financial history, employment status, and other details, as well as the exact loan type you choose. Conventional, FHA, VA, and USDA loans all come with unique requirements.
Who Should Get a Fixed Rate Mortgage?
A fixed rate mortgage may be an ideal option if you:
- Want a consistent, predictable monthly payment over the entire loan term
- Are concerned about interest rate changes and fluctuations
- Plan to stay in your home for many years
- Have inconsistent or fluctuating income
Pros and Cons of a Fixed Rate Mortgage
Pros:
- Consistent rates and monthly payments
- Easy to understand and predict
- Great for long-term homeowners
Cons:
- Slightly higher rates than adjustable rate mortgages
- Not ideal for short-term homeowners