What Is a Fixed-Rate Mortgage?

Short answer

A fixed-rate mortgage is a home loan whose interest rate is set at closing and never changes, so your principal and interest payment stays the same for all 15 or 30 years (CFPB, as of October 2026). On a $400,000 loan, a 30-year term means 360 equal payments. Your total payment can still change if taxes or insurance in escrow change.

Definition

A mortgage with one interest rate for its full term and fully amortizing payments, so the loan is paid off by the last scheduled payment.

Worked example

Example only, not a quote, same rate on both to isolate the term: $400,000 at 6%. The 30-year payment is about $2,398 in principal and interest; total interest about $463,353. The 15-year payment is about $3,375; total interest about $207,577. The 15-year costs about $977 more a month but saves about $255,776 in interest. In month 1 both charge $2,000 of interest, but the 15-year puts $1,375 toward principal versus $398. After 15 years, the 30-year loan still owes about $284,195.

Fixed rate vs. ARM

With a fixed rate, the rate is set when you take out the loan and will not change. With an ARM, the rate is fixed only for an initial period and then adjusts at regular intervals, so the payment can rise. The CFPB notes an ARM often starts lower and could be cheaper in the short term, while a fixed rate gives predictability. If you plan to stay for many years, the fixed payment is easier to budget. Rates vary daily; call for today's pricing.

15-year vs. 30-year

Per the CFPB, shorter terms generally save money overall but have higher monthly payments, and they often carry a lower rate. A 30-year term gives the lowest required payment, and you can still pay extra toward principal if there is no prepayment penalty. See how each payment splits between interest and principal in amortization.

• 15-year: faster equity, far less interest, higher payment and higher DTI
• 30-year: lower payment, easier to qualify, much more interest over the life of the loan

In South Florida

In South Florida the part that moves is usually escrow, not the loan. The CFPB notes your total payment can still change with property taxes, homeowners insurance or mortgage insurance. Budget for insurance renewals and, if you are in a flood zone, flood premiums. A homestead can limit how fast your assessed value rises; see the Save Our Homes cap.