What Is Fixed-Rate Mortgage?

A fixed-rate mortgage is a home loan where your interest rate stays the same for the entire repayment term, giving you a predictable principal-and-interest payment every month. The most common terms are 15 and 30 years. Over 90% of U.S. homebuyers choose a fixed-rate mortgage because it eliminates the risk of rising interest rates.

On a $300,000 loan at 6.5% fixed for 30 years, your monthly principal-and-interest payment would be $1,896 and never change. Over the full term you would pay $382,633 in total interest. Choosing a 15-year fixed at 5.75% raises your payment to $2,494 per month, but you pay only $148,876 in total interest—saving over $233,000.

Key Facts

• Most popular term: 30 years (about 90% of fixed-rate borrowers)
• Rate stability: Your rate and P&I payment never change
• Total interest (30-yr, $300K at 6.5%): Approximately $382,633
• Total interest (15-yr, $300K at 5.75%): Approximately $148,876

Frequently Asked Questions

Should I choose a 15-year or 30-year fixed-rate mortgage?

A 15-year term builds equity faster and saves you tens of thousands in interest, but your monthly payment will be roughly 40%–50% higher. Choose 30 years if you want lower required payments and more monthly cash-flow flexibility.

Can I refinance a fixed-rate mortgage later?

Yes. You can refinance into a new fixed-rate or adjustable-rate loan at any time, subject to qualifying. Refinancing makes sense when current rates are at least 0.50%–0.75% lower than your existing rate, after accounting for closing costs.