A fixed-rate mortgage is the most common type of mortgage loan program. With a fixed-rate mortgage, your monthly principal and interest payment will stay the same for the life of your loan. You can expect to make the same principal and interest payment each month regardless of changes in current market interest rates.

You will often hear the term amortization when learning about fixed rate mortgages. An amortization schedule is a fixed table that lays out how much of your monthly payment goes towards interest and how much go towards principal for the life of the loan. Fixed-rate mortgages are fully amortizing. This means the principal and interest owed on the loan are paid when your term ends. Each month, a portion of each payment you make is allocated to the interest owed; the rest of your payment reduces your principal balance. With a fixed rate mortgage, your monthly payment of principal and interest will remain the same; however, during the initial years of your mortgage, most of your monthly payment will go toward your loan's interest. However, as the loan ages, larger portions of each payment will reduce the principal. If you mortgage includes an escrow account, a portion of your monthly payment will also go towards your escrows.

There are many different types and terms for fixed-rate mortgages. They can be as short as 10-years, or as long as 30-years. You can also get a conventional, FHA, VA, or USDA mortgage with a fixed interest rate. Your loan officer can help you determine which loan type and term will be the best for you.

Depending on the type of fixed-rate mortgage that you choose, the down payment requirement will vary. For example, if you are eligible for a VA loan, no down payment is necessary. Other loan types and their corresponding down payments will be determined by other factors.

The biggest advantage of a fixed-rate mortgage is that the interest rate never changes. This means that the interest and principal portions of your payment remain consistent over the life of your loan. Even when interest rates rise, you can rest assured that your payment of principal and interest will not increase.