Mortgage

Fixed-Rate Mortgage A home loan with one locked interest rate for the whole term

Priya Shah By Priya Shah, Senior Mortgage Editor · Updated 2026-06-09
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A fixed-rate mortgage is a home loan whose interest rate stays the same for the entire term, keeping your principal-and-interest payments constant from the first payment to the last. Because the rate never moves, your monthly principal and interest are predictable, which makes budgeting simpler over the life of the loan. The main contrast is with an adjustable-rate mortgage (ARM), where the rate can change after an initial period based on market indexes. With a fixed-rate loan, you trade the chance of a lower starting rate for the certainty of a constant payment. Keep in mind that taxes and insurance held in escrow can still change your total monthly bill even when the rate is locked. Available terms vary by lender, and the rate you qualify for typically depends on your credit, down payment, and market conditions.
Also Known As
Fixed-Rate Home Loan FRM Fixed Mortgage Conventional Fixed Loan
Used in Context
  1. When she wanted predictable payments, she chose a fixed-rate mortgage instead of an ARM that could rise later.
  2. A Dreamy Leads form helped match the buyer with lenders offering fixed-rate mortgage quotes for comparison.
  3. Even with a fixed-rate mortgage, his monthly bill went up slightly because his property tax escrow increased.
Related Terms
Mortgage Adjustable-Rate Mortgage (ARM) A home loan with a fixed starter rate that later moves up or down with the market Mortgage Amortization The schedule that shows how each loan payment splits between principal and interest over time Mortgage Conventional Loan A mortgage not backed by a government agency — the most common home loan type Mortgage Escrow Account A lender-held account that pays your property taxes and homeowners insurance from your mortgage payment Mortgage Rate-and-Term Refinance Refinancing to change your rate or term without pulling out cash Mortgage Mortgage Rate Buydown Paying upfront to lower your mortgage rate, either permanently or temporarily
Frequently Asked Questions

How is a fixed-rate mortgage different from an ARM?

A fixed-rate mortgage keeps the same interest rate for the entire term, so your principal-and-interest payment stays constant. An ARM (adjustable-rate mortgage) can change its rate after an initial period, which may raise or lower your payment based on market conditions. Fixed loans favor predictability over a potentially lower starting rate.

Can my monthly payment change on a fixed-rate mortgage?

Your principal-and-interest portion stays constant because the rate is locked. However, your total monthly bill can still change if property taxes or homeowners insurance held in escrow go up or down. The loan's interest rate itself does not change for the entire term.

Is a fixed-rate mortgage better than an adjustable one?

It depends on your goals. A fixed-rate mortgage offers a constant payment and protection from rising rates, which many buyers prefer for budgeting. An ARM may start lower but can increase later. The right choice typically varies by how long you plan to stay and your tolerance for payment changes.

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