Fixed Rate Loan Payments
What is a fixed-rate loan? Just as the name implies, a fixed-rate loan is one where the rate is fixed, or never changes. If you start with a 30-year fixed
mortgage rate of 4 percent today, you will have that rate locked in for the life of the loan. The alternative to a fixed-rate mortgage loan is an adjustable-rate
mortgage or ARM. With an ARM, your mortgage rate fluctuates over time depending on market conditions. You could start with a lower interest rate initially,
but that rate could rise or fall should the rate adjust to market conditions.
The 30 and 15-year fixed-rate mortgages are by far the most popular type of home loans, accounting for about 75 percent of all U.S. residential mortgages.
They are available in other lengths as well, 20 and 10-year fixed-rate mortgages in particular. Lenders will sometimes offer other lengths as well.
The shorter the term of your fixed-rate mortgage loan, the less interest you will pay. So on a 10-year fixed mortgage,
the amount of interest payable is lower than the interest payable on 15, 20 or 30 year fixed mortgages. You pay much less interest with the shorter loans and lower
rates, but your monthly payments are higher because you are making larger payments toward your loan principal each month. So you want to choose
the type of mortgage that best fits your situation and goals.
Use this calculator to figure out your monthly payment and amortization schedule.
The fixed monthly payment for a fixed-rate mortgage is the amount paid by you every month that ensures that the loan is paid off in full with interest at the end of its term.
Your monthly payment includes repaying what you've borrowed (the principal) as well as the bank's fee for borrowing the money (the interest).
Consider the benefit of prepaying a loan.
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Related Mortgage Terms
||The amount borrowed or the remaining unpaid balance of a loan excluding unpaid accrued interest; also refers to the portion of the monthly payment that reduces the outstanding balance of a loan.
||The time frame when a loan line of credit must be repaid. The most common mortgage terms are 15 years and 30 years.
||The cost a customer pays to a lender for borrowing funds over a period of time expressed as a percentage rate of the loan amount.
||The frequency of prepayment. The options are none, monthly, yearly and one-time payment.
||Amount that will be prepaid on your mortgage. This amount will be applied to the mortgage principal balance, based on the prepayment type.
||This is the payment month number that your prepayments will begin with.
||Total of all monthly payments over the full term of the mortgage.
||Total of all interest paid over the full term of the mortgage.
||Total amount of interest you will save by prepaying your mortgage.