Mortgage Glossary

Fixed-Rate Mortgage

A mortgage with an interest rate that never changes. Your principal and interest payment stays the same for the entire loan term.

What It Means

A fixed-rate mortgage locks in your interest rate at the start of the loan — and it stays the same for the entire term, whether that's 15, 20, or 30 years.

This predictability makes budgeting easy. No matter what the market does, your principal and interest payment won't change.

Fixed-rate loans are ideal for buyers who:

Plan to stay in the home long term
Want stability and predictability
Are locking in at a rate they're comfortable with

30-year terms have lower monthly payments but higher total interest. 15-year terms cost more per month but build equity faster and pay far less interest overall.

Real-World Example

"You get a 30-year fixed mortgage at 6.75%. Your principal and interest payment is $1,948/month. It's still $1,948 in year 29 — even if rates rise to 9%."

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Related Terms

Adjustable-Rate Mortgage

Amortization

Interest

Related Insights

How to Read a Loan Estimate: What Every Number Means Before You Sign

A Loan Estimate is a standardized three-page document every lender must provide within three business days of your mortgage application, and knowing how to read each section can save you thousands and help you compare lenders fairly. This guide walks through every key number — from loan terms and projected payments to closing costs, APR, and the five-year comparison — so you know exactly what you're looking at before you sign.

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Definitions are for educational purposes only and do not constitute financial or legal advice.