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Fixed Rate Mortgages

With a fixed rate mortgage, payments toward both the interest and principal remain constant over the life of the loan. As a result, monthly loan payments stay the same. Taxes, however, may change according to local or state tax laws.

Advantages of fixed rate mortgages:

  • The interest rate stays the same – it doesn’t go up even if rates in the market do.
  • Monthly payments of principal and interest don’t change.
  • They may be a good choice for buyers who plan to own their new homes for a long time.

Disadvantages of fixed rate mortgages:

  • They may cost more than other loan types – the interest rate is often higher than rates for adjustable rate mortgages.
  • A long-term loan may not be suitable for a homebuyer planning to sell or refinance a new home within five to seven years.

Types of Fixed Rate Mortgages

Fixed rate mortgages traditionally have 15-year or 30-year amortization terms. PHH Mortgage offers these options, as well as loans with 20-year and 25-year terms. 

30-year fixed rate mortgage

25-year fixed rate mortgage

20-year fixed rate mortgage

15-year fixed rate mortgage

Which term will work best for you?

A short-term loan:

  • May work well for a homebuyer planning to own a home for a shorter length of time
  • Enables a homebuyer to pay off the loan more quickly
  • Generates less interest, and therefore lower overall costs, over the life of the loan
  • Translates into higher monthly payments
  • Builds equity more quickly

A long-term loan:

  • May be good for a homebuyer planning to own a home for a longer time period
  • Results in the loan being paid off more slowly
  • Generates more interest, and therefore higher overall costs, over the life of the loan
  • Translates into lower monthly payments
  • Builds equity more slowly
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