Long Term Fixed Rate Mortgage

A Long Term Fixed Rate Mortgage is the most common type of mortgage in which the interest rate remains fixed throughout the entire loan term.  The loan term is usually either 15 or 30 years and depends somewhat on the mortgage interest rate since theat and the length of the mortgage term are what impact the payment amount the most.

For example, lets say you took out a mortgage of $100,000 for 15 years at 4% interest rate from a mortgage company. The mortgage interest rate, which is 4%, will not change throughout the entire term of the loan. This type of mortgage is known as a long term fixed rate mortgage.

Fixed rate mortgage options can be found by submitting the mortgage type and your zip code in the form on the right sidebar.

Features:

• The long term fixed rate loan term is usually taken for a period of 15 or 30 years.
  
• The monthly payment towards the principal and the interest remain the same throughout the loan period.
  
• During the first several years of a fixed rate loan, the borrower pays a larger portion of interest than that paid towards the end of the loan term. The portion of the monthly payment towards the principal remains low during the initial period and then increases towards the end of the loan term.
  

• 40 year long term fixed rate mortgage
  
  A fixed rate home loan that is to be paid off within a period of 40 years. The monthly payments are lower in comparison to 15 year or 30 year home loans.
  
  
• 30 year long term fixed rate mortgage
  
  These are payable in 30 years at fixed rates of interest. The monthly payments are lower than that of 15 year mortgages because the interest is amortized for a comparatively longer time frame.
  
  
• 15 year long term fixed rate mortgage
  
  These long term home loans are paid off in 15 years with monthly payments higher than that for long term loans like 30 year mortgages. The total interest payment is lower as the amortization period is shorter.
  
  
• Bi-weekly mortgage
  
  Home loans of this type require payments twice a month, that is, after every two weeks instead of standard monthly payments. Each bi-weekly payment is equal to one-half of the total monthly payment.
  
  
• Convertible mortgage
  
  Convertible fixed rate mortgages provide homeowners with a loan which can be converted to a low interest rate.
  
  
• Balloon mortgage
  
  Balloon mortgage refers to a short term fixed rate home loan requiring low monthly payments for a period of 5 to 7 years. At the end of the short term, the remaining balance is paid in a lump sum amount known as the Balloon payment. There is also the option to convert into a long term fixed rate loan in case the borrower fails to make the balloon payment.

A long term fixed rate mortgage ensures stable monthly payments but a longer loan term.  You will pay a greater amount of interest compared to a shorter loan term fixed rate mortgage.

Now find out about an adjustable rate mortgage.

Compliments of Mortgagefit.com