Fixed Rate Mortgages

Fixed rate mortgages become very affordable when rates are low. If you do not want your house payment to rise and fall with the interest rates, then a fixed rate mortgage may be for you.

Fixed rate mortgages are generally for 15-year and 30-year periods.

30-year mortgages over lower monthly payments because the interest amortizes over a longer period. This allows you to use your money in other investments. The higher interest bill means you can deduct more at tax time! However, this does mean that for the first few years your payments are going largely toward the interest (rather than the principal). This means that you are building equity at a slower pace. The overall amount of interest paid will be higher and interest rates are higher.

15-year mortgages can have significantly higher payments. But, you will build equity faster because of shorter amortization schedules; overall interest bills are lower as are interest rates.