What is a Fixed-Rate Mortgage (FRM)?

Fixed-Rate Mortgage (FRM) is a mortgage that does not change over the life of the loan. FRM has a fixed interest rate for the entire term of the loan.  Most Fixed-Rate Mortgages are fully-amortizing, which means the payment first covers the interest charge for the previous month, and then what’s left is used to reduce the principal balance. Every month, as the principal balance gets smaller, less of the payment is needed to cover the previous month’s interest, and more is allocated toward the principal reduction. At the end of the loan’s term, the balance is extinguished and the mortgage is paid in full. 


Fixed-Rate monthly installment loans is one of the most popular mortgage product offerings.


Fixed-Rate Mortgage can make budgeting easier for borrowers, because the principal and interest payment does not change. That is good when interest rates are rising, but when interest rates fall, borrowers with fixed rate home loans must refinance in order to take advantage of lower rates on the market. 


The most common Fixed-Rate Mortgages are:      10-year    15-year     30-year