This traditional loan maintains its original interest rate throughout its life. Any change in monthly loan payments will be due to increases in charges like insurance or taxes that will naturally occur over time. Fluctuations in markets over the term of your loan won’t have any impact on the amount of interest you pay because that rate is already fixed.  A fixed rate mortgage loan may be a good choice if you:

• Want to increase your qualified amount
• Want the security of knowing what your mortgage payment will always be
• Plan to stay in this home for at least 10 years
• You don’t expect your income to increase significantly

Fixed-rate mortgage loans come in 10-, 15-, 20-, 30-, and even 40-year terms. In determining the length of your loan, you may want to consider:

• Total amount of interest you want to pay over the course of the loan
  • For example, the total cost of a 40-year loan is higher than the total cost of a 10-, 15-, 20-, or 30-year loan. You are trading lower monthly payments for a greater number. (It takes about 22.5 years to pay off half the principal of a 30-year loan.)
• Your ability to make high monthly payments
• If you can afford to pay more per month, you reduce the number of payments you make.  Also, choosing a 15-year term will save you thousands in interest charges.

Another option to shorten loan time and decrease the amount of interest you pay is to get a 30-year loan and pay extra each month toward the principal.