Fixed Rate Mortgage

Current Rates are Still Near Record Lows

Fixed Rate Mortgages: If you are looking for a consistent mortgage payment that will not change over time, a fixed rate mortgage (FRM) could be right for you. Often, your initial mortgage rate for a fixed rate mortgage will be a little higher than what you’ll find offered on Adjustable Rate Mortgages, but your mortgage rate won’t be subject to fluctuations either. These rates tend to be a little higher because the lender takes on the interest rate risk. With today’s rates still near record lows, you could end up paying less interest over time because there is no danger of your rate suddenly going up as the housing market improves. The most common terms, or lengths, of fixed rate mortgages are 15 years and 30 years. 15 year mortgage rates will generally be lower than 30 year mortgage rates because there is less risk for the lender. Between the shorter term and the lower interest rates, you can end up saving a lot of money if you can afford the payments on a shorter term loan. Let’s look at a scenario: In this example, you’re looking to borrow $100,000, and you qualify for a 15 year mortgage rate of 3.5% or a 30 year mortgage rate of 4%.

$100,000 Fixed Rate Mortgage Costs	15 Year FRM at 3.5%	30 Year FRM at 4.0%
Monthly Payment	$715	$477
Interest Paid During the First 5 Years	$15,187	$19,092
Interest Paid Over the Full Term of the Mortgage	$28,679	$71,870

As you can see, you can save a lot of money if you can afford the payments on a shorter term loan, but not everybody can afford that. On the other hand, the lower payments of a 30 year mortgage can often allow you to buy a bigger or better home than you could afford with a 15 year loan. Here at Nextgen Mortgage, we have fixed rate mortgages available in several term lengths, and we will help you decide which term would be best for you.

We represent multiple lenders and will shop for the best lender and rate for you and your financial situation so you don’t have to. Contact us today to speak with an expert Mortgage Planner and see if a Fixed Rate Mortgage is right for you!