What is a Fixed-Rate Mortgage?
A fixed-rate mortgage is a home loan where the interest rate stays the same for the entire life of the loan. That means your monthly principal and interest payments never change, offering stability and predictability—ideal for long-term homeowners.
Fixed-Rate Mortgage Requirements
- Credit Score: Minimum 620+ (higher scores get better rates)
- Down Payment: Minimum 3% to 5% depending on the loan program
- Stable Income & Employment History
- Debt-to-Income Ratio (DTI): Usually below 45%
- Loan Limits: Must fall within conforming or program limits unless it’s a jumbo fixed-rate loan
Why Choose a Fixed-Rate Mortgage?
- You want stable monthly payments
- You prefer budgeting certainty over time
- You want to lock in a rate when interest rates are low
Down Payment Options for Fixed-Rate Mortgages
- 3% down: For first-time buyers (Conventional loans)
- 3.5% down: FHA loans (fixed-rate version)
- 5%–20% down: For most other conventional buyers
- 20% down: Avoids PMI and gets best terms
- Gift funds: Often allowed to cover all or part of the down payment
Types of Fixed-Rate Mortgages
- 30-Year Fixed: Most popular. Lowest monthly payments. Pays more interest over time.
- 20-Year Fixed: Shorter term, less interest than 30-year. Slightly higher monthly payment.
- 15-Year Fixed: Lower interest rate and less total interest. Higher monthly payment, but builds equity faster.
- 10-Year Fixed: Fastest payoff and lowest interest paid. Highest monthly payments.
Benefits of Fixed-Rate Mortgages
- Consistent Monthly Payments
- Protection from Rising Interest Rates
- Easy to Budget Long-Term
- Multiple Term Options (10, 15, 20, 30 years)
- Great for First-Time Buyers and Long-Term Homeowners
- Can be used for primary homes, second homes, or investment properties
