Fixed-rate mortgages remain the most popular type of home financing. A fixed-rate mortgage is a good option for nearly every type of borrower, whether you plan to stay in the house for the long term or just for a few years, because with these loans, the interest rate is fixed for the life of the mortgage, so your monthly principal and interest mortgage payments never change.

The most common type is a 30-year fixed mortgage, but there are other options available. WJB offers 25-, 20-, 15- and 10-year terms in addition to the 30-year term. When you choose a shorter term, your monthly payments will be higher, but you’ll pay off the loan in a shorter amount of time and consequently pay less interest to your lender. Take a look at our amortization schedule to get a better idea of how that works.

We also offer an interest-only option, which allows you to pay just the interest for the first 10 years you have the loan. This can keep your payments lower for the initial interest-only period. The interest-only option is great for people who need lower monthly payments and who will either sell the home within 10 years and are not concerned with building a lot of equity, or who expect an increase in their income before the payments change.

Fixed rate loans, the interest rate does not change for the term of the loan, so the monthly payment is always the same. Typically, the shorter the loan period, the more attractive the interest rate will be.

Payments on fixed-rate fully amortizing loans are calculated so that the loan is paid in full at the end of the term. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the interest on the loan. As the mortgage is paid down, more of the monthly payment is applied toward the principal.

30 Year fixed rates mortgage is the most popular type of loan when borrowers are able to lock into a low rate.

Benefits:

• Lower monthly payments than a 15 year fixed rate mortgage
• Interest rate does not go up if interest rates go up
• Payment does not go up, it stays the same for 30 years

Drawbacks:

• Higher interest rate than a 15 year fixed rate mortgage
• Interest rate stays the same even if interest rates go down
• 15 Year fixed rate mortgage allows you to pay off your loan quicker and lock into an attractive lower interest rate.

Benefits:

• Lower interest rate
• Build equity faster
• If interest rates go up, yours is fixed

Drawbacks:

• Higher monthly payment stays the same if interest rates go down
• Interest rate stays the same even if interest rates go down
• This option offers the stability of unchanging payments, allowing you to plan your budget and your monthly expenses with confidence. If it appears that interest rates are likely to rise over the long
• term, this is a good choice. Let’s talk about whether a fixed-rate mortgage might be the home financing solution that best fits your needs!