What is Fixed Mortgage?

A fixed mortgage, also known as a fixed-rate mortgage, is a type of home loan where the interest rate remains the same throughout the term of the mortgage. This means that your monthly payments, which include both principal and interest, will remain consistent for the duration of the fixed-rate period. Here’s a breakdown of how a fixed mortgage works and its key features:

Features of a Fixed Mortgage

1. Stable Interest Rate: The interest rate is set at the beginning of the mortgage term and does not change. This stability allows for predictable monthly payments.
2. Consistent Payments: Your monthly mortgage payments are fixed, making it easier to budget and plan your finances. This consistency can be reassuring, especially if interest rates rise in the future.
3. Term Lengths: Fixed-rate mortgages typically come in various term lengths, such as 2, 5, 10, 15, 20, or 30 years. The term you choose will affect your monthly payment amount and the total interest paid over the life of the loan.
4. Predictability: Because the interest rate and payments remain constant, you can avoid surprises related to changing interest rates. This predictability can be beneficial for long-term financial planning.A fixed mortgage, also known as a fixed-rate mortgage, is a type of home loan where the interest rate remains the same throughout the term of the mortgage. This means that your monthly payments, which include both principal and interest, will remain consistent for the duration of the fixed-rate period. Here’s a breakdown of how a fixed mortgage works and its key features:How a Fixed Mortgage Works
   1. Application and Approval: You apply for a fixed-rate mortgage through a lender. They will assess your financial situation, including your credit score, income, and debt levels, to determine your eligibility and interest rate.
   2. Setting the Rate: Once approved, the lender sets the interest rate based on market conditions, your creditworthiness, and the term of the mortgage.
   3. Monthly Payments: You make regular monthly payments that include both principal and interest. The principal payment reduces your loan balance, while the interest is calculated based on the remaining balance.
   4. Repayment: Over time, as you make payments, the portion going towards interest decreases while the portion going towards the principal increases. By the end of the term, your mortgage is fully paid off.