Fixed-Rate Mortgage
A fixed-rate mortgage keeps the same interest rate for the full term, which means the payment amount is typically stable. This makes budgeting easier, because your rate does not change with market conditions during the term.
Fixed-rate mortgages are often chosen for certainty and risk control. The trade-off is that fixed rates can be higher than variable rates at times, and breaking a fixed mortgage early can result in larger penalties.
Why this matters:
Predictability is valuable, especially when budgets are tight. Understanding fixed rates helps borrowers decide how much rate risk they are willing to take on.
Related Mortgage Terms
Often confused with:
Variable-Rate Mortgage — Variable rates can change during the term.
Closely related:
Mortgage Term — Fixed rate applies for the term length.
Closed Mortgage — Many fixed mortgages are closed with break penalties.
Next step:
Variable-Rate Mortgage — Compare stability versus potential rate movement.