Fixed rate mortgage definition: What borrowers should know

by Cary Garcia 05/21/2023

To choose the right mortgage loan, it’s important to understand the “fixed rate mortgage” definition. This type of loan has several advantages, including predictable monthly payments and long repayment terms. However, a fixed rate mortgage might not be right for everyone.

Here is a quick guide to understanding this type of mortgage:

Fixed-rate mortgages vs. adjustable-rate mortgages

When comparing mortgages, you’ll encounter fixed rate mortgages and adjustable rate mortgages. As the name suggests, the interest rate of an ARM adjusts with market fluctuations, but the loans are offered at low introductory rates for a limited time period. 

ARMs usually have introductory rates lasting anywhere from one to five years. Once the introductory period ends, your interest rate will increase with a cap of to 2% per year, or 5% over the lifetime of the loan. 

Compared to fixed rate mortgages, ARMs are more complex loan programs and typically better for borrowers who have less intention of staying in the same home for an extended period of time.

Pros & cons of a fixed-rate mortgage

Fixed-rate loans are incredibly affordable because of the predictable nature of their repayments. While the homeowners coverage and taxes may vary, your mortgage payment will remain the same. This affects your budget for the rest of your month, and plays a major part in your financial planning. 

Besides reducing the risk of default on fixed-rate loans, your loan rate remains constant. Whatever your rate is, the amount you paid will remain unchanged when you took the loan. Often, these rates are higher than they would be for an ARM.

How long does it take to repay a fixed-rate mortgage?

Fixed-rate mortgages can be repaid during a predetermined amount of time. They are usually offered as 30-year home loans, giving you a maximum of 30 years to pay the full amount. 

This may seem like a long time, but the extended timeline is one thing that ensures a lower monthly mortgage payment.

There are other options available, such as a 15-year mortgage. These can work well if the borrower has sufficient cash to pay the loan more quickly while still taking advantage of the fixed interest rate.

About the Author

Cary Garcia

As a real estate broker licensed in Virginia, Maryland, and Washington, D.C., I work strictly by referral. For over 20 years, my success has hinged entirely on detailed, efficient service to clients like you.


Finding a real estate agent is easy. Finding a skilled agent is the hardest…What separates me from other real estate agents is my extensive knowledge of contract law. You need an agent who understands the legality of the contract by enforcing the terms of the offer as well as all of the contingencies, addendums and disclosures. Before signing the offer, I will thoroughly explain the contract in detail, so you understand what you are committing to.I bring an expert’s perspective to help buyers and sellers make the right decisions. 

Because I understand the legal and highly emotional aspects associated with real estate transactions, I am able to provide expert guidance to help you make informed and educated decisions. In addition, I’m very skilled at project coordination. 

With so many people involved in the home sale process, I know how to create satisfying resolutions and make the process go as smoothly and successfully as possible.