Fixed-rate mortgage
A mortgage where the interest rate stays the same for the whole loan. Payments don't change. The most common type in the U.S. for good reason: predictability.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
Most buyers arrive with a fixed-rate loan, which is the simplest kind for a seller to understand: the payment they qualified for is the payment they will make. It also matters when you finance the next home.
Part 2 of 4
A simple example
The buyer of your home takes a 30-year fixed at 6.5% on $240,000. Their payment is about $1,517 a month for thirty years.
| The loan | What the buyer's payment does |
|---|---|
| 30-year fixed at 6.5% | Stays at about $1,517 for the life of the loan |
| A 7/1 ARM at 5.9% | Lower for seven years, then follows the market |
| Refinanced later | A new fixed payment, at whatever the rate is then |
Fixed means the rate at closing is the rate forever, which is why most buyers choose it.
Part 3 of 4
What people get wrong
That a fixed-rate payment never changes at all. The principal and interest do not; the taxes and insurance collected with it can.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
One piece of your sale. Here is where all the pieces live.
In your room, this word explains itself where it appears.
Keighbor keeps your whole home sale in one place and defines every term like this one right where you meet it, in the step you're on. Free to set up, with or without an agent.