Fixed Rate Mortgage — Your Payment Never Changes
Lock in one rate for 15, 20, or 30 years. No surprises, no adjustments, no guessing what next year's payment will look like. I shop dozens of wholesale lenders to find the lowest fixed rate for your situation.
What Is a Fixed Rate Mortgage, and Why Do Most Borrowers Choose One?
A fixed rate mortgage is exactly what it sounds like — a home loan where the interest rate stays the same from your very first payment to your very last. Whether you choose a 15-year term or a 30-year term, the principal and interest portion of your monthly payment never changes.
In over 23 years of originating mortgages, I have seen interest rates swing from under 3% to over 7% and back again. Through all of that volatility, the fixed rate mortgage remains the most popular choice for a reason: it eliminates one of the biggest financial unknowns in homeownership. You sign at closing knowing exactly what your housing payment will be for the next decade, two decades, or three. That kind of predictability is hard to put a price on.
About 90% of home buyers choose a fixed rate mortgage, and for most people, it is the right call. But "fixed rate" is not a single product — it comes in different term lengths, each with real trade-offs in monthly payment, total interest cost, and equity-building speed. Let me walk you through the options so you can make a genuinely informed decision.
Fixed Rate Mortgage Terms: 15, 20, and 30 Years Compared
The term you choose determines how long you have to pay off the loan. A shorter term means a higher monthly payment but a lower rate and dramatically less interest paid over time. Here is how the three most common terms compare.
30-Year Fixed
The lowest monthly payment of any fixed rate option. Gives you maximum cash flow flexibility — money you can redirect toward retirement accounts, emergency savings, or home improvements. About 90% of fixed rate borrowers choose this term.
20-Year Fixed
A middle ground that gets overlooked. You pay off the loan a full decade sooner than a 30-year with a moderately higher monthly payment. Total interest savings are substantial. The rate is sometimes comparable to 30-year pricing, making this a quiet winner for disciplined borrowers.
15-Year Fixed
The lowest interest rate of any fixed rate term — typically 0.50% to 0.75% below 30-year pricing. Builds equity at roughly double the pace of a 30-year. The trade-off is a significantly higher monthly payment. Best for borrowers who can comfortably absorb that payment and want to be mortgage-free sooner.
Real Dollar Comparison on a $400,000 Loan
Numbers make the trade-offs concrete. This table shows approximate total interest paid across terms, based on typical rate spreads between terms. Actual rates depend on your credit, down payment, and the lender — which is exactly why I shop multiple lenders for every client.
| Factor | 30-Year Fixed | 20-Year Fixed | 15-Year Fixed |
|---|---|---|---|
| Typical Rate Spread | Baseline | Similar to 30-year | ~0.50–0.75% lower |
| Monthly P&I (approx.) | Lowest | ~$400–600 higher | ~$800–1,000 higher |
| Total Interest Over Life | Highest (often $400K+) | ~35–40% less than 30-yr | ~55–60% less than 30-yr |
| Equity at Year 5 | ~6% of loan paid | ~14% of loan paid | ~25% of loan paid |
| Qualification | Easiest (lowest payment) | Moderate | Hardest (highest payment) |
| Best For | Cash flow, investing elsewhere | Balance of payment & savings | Fast payoff, interest savings |
My take: I do not push every client toward a 15-year mortgage just because it saves interest. If a 15-year payment stretches your budget thin, a 30-year with occasional extra payments is often the smarter play. You get the lower required payment when cash is tight and the ability to accelerate payoff when it is not. The flexibility matters more than people realize.
Fixed Rate vs. Adjustable Rate: When Each Makes Sense
The other major decision is whether to go fixed or adjustable. An adjustable rate mortgage (ARM) starts with a lower introductory rate for a set period — typically five, seven, or ten years — and then adjusts periodically based on a market index. That initial rate is usually lower than a fixed rate, which is the entire appeal.
But here is the reality I have seen play out hundreds of times: most people who take an ARM planning to sell or refinance before the adjustment period end up staying longer than expected. Life happens. The housing market shifts. Refinance rates are not always favorable when you need them to be. And when that ARM adjusts upward, the payment increase can be substantial.
| Factor | Fixed Rate | Adjustable Rate (ARM) |
|---|---|---|
| Interest Rate | Stays the same forever | Lower initially, adjusts after intro period |
| Monthly Payment | Never changes (P&I) | Can increase or decrease at adjustment |
| Risk Level | No rate risk | Payment could rise significantly |
| Best Timeframe | Staying 7+ years or uncertain | Selling or refinancing within 5–7 years |
| Budget Certainty | Complete predictability | Uncertain after intro period |
| Rate Environment | Ideal when rates are moderate to low | Useful when rates are high and expected to fall |
When a Fixed Rate Is Almost Always the Better Call
- You plan to keep the home long-term — if there is any chance you will stay more than seven years, the fixed rate eliminates the risk of a payment jump.
- You prefer budget certainty — knowing your exact housing cost for decades makes financial planning straightforward.
- You are buying a rental property — cash flow projections for investment properties depend on predictable expenses. A rate adjustment can turn a profitable rental into a break-even proposition overnight.
- Rates are at historically moderate levels — locking in a fixed rate when rates are reasonable protects you if they climb significantly in the future.
When an ARM Might Deserve a Look
- You are confident you will sell within five years — relocating for work, upgrading to a larger home, or downsizing on a known timeline.
- You need maximum purchasing power right now — the lower ARM rate means a lower payment, which can help you qualify for a higher purchase price.
- You have a disciplined refinance strategy — and the financial reserves to execute it regardless of market conditions.
Honest advice: The Consumer Financial Protection Bureau cautions against assuming you will be able to sell or refinance before an ARM adjusts. Property values can decline, financial situations can change, and refinance rates might not cooperate. If you cannot afford the higher payment on today's income, a fixed rate mortgage is the safer path. I tell every client the same thing.
Who Benefits Most from a Fixed Rate Mortgage?
A fixed rate mortgage is not a niche product — it fits the vast majority of borrowers. But certain situations make it especially valuable.
First-Time Buyers
You are already juggling a new mortgage payment, property taxes, insurance, and maintenance costs. A fixed rate removes one variable from the equation. Pair it with an FHA loan at 3.5% down or a conventional 97 at 3% down and your path to homeownership stays predictable from day one.
Growing Families
Children mean rising expenses — childcare, education, activities. Knowing your mortgage payment will not increase gives you room to absorb those costs without financial stress. A 30-year fixed rate keeps the payment manageable while your family grows.
Real Estate Investors
If you are buying a rental property, your entire cash flow projection depends on predictable expenses. A fixed rate mortgage locks in your largest cost for the life of the loan, making it far easier to project returns and plan for the long term.
Nearing Retirement
If you are within 10 to 15 years of retirement, a fixed rate protects you from payment increases on a fixed income. A 15-year fixed can align your payoff date with your retirement timeline so you enter that phase of life mortgage-free.
Fixed Rate Mortgage Requirements
Qualification standards vary by loan program, but here is a general overview of what lenders look at. As a broker, I work with lenders across the credit spectrum, so even if one lender says no, another may say yes at competitive terms.
| Requirement | Conventional | FHA | VA |
|---|---|---|---|
| Minimum Credit Score | 620 (best pricing at 740+) | 580 (500 with 10% down) | No VA minimum (most lenders want 580–620) |
| Down Payment | 3% – 20%+ | 3.5% (10% if score under 580) | 0% (100% financing) |
| Debt-to-Income Ratio | Up to 45–50% | Up to 50–57% with compensating factors | Up to 60% with residual income |
| Mortgage Insurance | PMI if under 20% down (removable) | MIP for life of loan (under 10% down) | VA funding fee (no monthly MI) |
| Employment History | 2 years in same field | 2 years in same field | 2 years (or stable military history) |
| 2026 Loan Limit (1-unit) | $832,750 (AZ) / $1,249,125 (high-cost) | $557,750 (Maricopa Co.) | No limit with full entitlement |
Broker advantage: Credit score is one of the biggest drivers of your fixed rate. But here is what most borrowers do not know — every lender prices credit score tiers differently. Lender A might give you their best tier at 740, while Lender B starts the best tier at 720. When I shop your loan, I am not just comparing rates — I am comparing how each lender scores your specific profile. That granular matching is something you cannot replicate by calling one bank.
Smart Prepayment Strategies for Fixed Rate Mortgages
One of the best features of a fixed rate mortgage is that you are never locked into the minimum payment. Here are proven strategies for paying off your loan faster without refinancing into a shorter term.
Make One Extra Payment Per Year
Take your monthly payment, divide by twelve, and add that amount to each monthly payment. You end up making the equivalent of 13 payments per year instead of 12. On a 30-year fixed rate mortgage, this single change can cut roughly four to five years off your term and save tens of thousands in interest.
Biweekly Payment Schedule
Instead of one monthly payment, make half your payment every two weeks. Since there are 52 weeks in a year, that is 26 half-payments — equivalent to 13 full payments. Same math, slightly different execution. Not every servicer offers this directly, but you can replicate it manually.
Lump-Sum Principal Payments
Got a bonus, tax refund, or inheritance? Applying a lump sum directly to principal has an outsized impact early in the loan when most of your payment goes toward interest. A $10,000 principal payment in year two of a 30-year mortgage saves far more in lifetime interest than the same payment in year twenty.
The 30-Year-with-Discipline Approach
This is one I recommend often: take the 30-year fixed rate for the lower required payment, but make payments as if you had a 20-year or 15-year mortgage. If your finances tighten — job change, medical expense, home repair — you can drop back to the 30-year minimum without penalty. You get the safety net of the lower payment with the option to accelerate when it makes sense. It is the best of both worlds.
Important note: When making extra payments, always confirm with your loan servicer that the additional amount is being applied to principal, not advanced toward future payments. The distinction matters — principal reduction saves you interest, while payment advancement does not.
How I Find You a Better Fixed Rate Than the Bank
This is where working with a broker makes the most measurable difference. Fixed rate mortgages are the most widely available product in the market — every lender offers them. But the rate and fees vary significantly from lender to lender on the same day, for the same borrower.
The Wholesale Rate Advantage
Banks and credit unions offer retail rates — their posted rates include a markup that covers their overhead, branches, and marketing. When I submit your loan through the wholesale channel, lenders compete for your business at wholesale pricing. That markup is reduced or eliminated. On a fixed rate mortgage, even a small pricing difference — an eighth of a percent — saves thousands over the life of the loan.
Lender-Level Pricing Differences
On any given day, I might see 30-year fixed rate pricing from 20 or more wholesale lenders. The spread between the best and worst rate — for the exact same borrower — can be a quarter percent or more. Over 30 years on a $400,000 loan, that adds up to real money. I run your scenario through every available lender and show you the top options with full transparency on rate, fees, and total cost.
Locking Strategy
Timing your rate lock is an art. Lock too early and you might miss a dip. Wait too long and rates could move against you. I monitor the market daily and advise on lock timing based on current trends, your closing timeline, and your risk tolerance. Most of my fixed rate clients lock for 30 to 45 days, but I have access to extended lock periods up to 90 days when the timeline calls for it.
The bottom line: a fixed rate mortgage from a broker is the same product as a fixed rate mortgage from a bank — same Fannie Mae or Freddie Mac guidelines, same consumer protections, same secondary market. The difference is price. And on a fixed rate loan, price is everything.
Fixed Rate Mortgage Questions
A fixed rate mortgage is a home loan where the interest rate stays the same for the entire life of the loan. Whether you choose a 15, 20, or 30-year term, your principal and interest payment never changes. This makes budgeting straightforward — you know exactly what you owe every month for the next 15 to 30 years, regardless of what happens with market interest rates.
It depends on your priorities. A 30-year fixed rate gives you the lowest monthly payment and maximum cash flow flexibility, which is why about 90% of borrowers choose it. A 15-year fixed rate typically comes with a lower interest rate — usually 0.50% to 0.75% lower — and you will pay dramatically less interest over the life of the loan. On a $400,000 mortgage, the 15-year option can save you over $200,000 in total interest. The trade-off is a significantly higher monthly payment. I walk every client through both scenarios with real numbers so the right choice becomes clear.
A fixed rate mortgage is typically the better choice when you plan to stay in the home for more than seven years, when rates are relatively low and you want to lock in long-term protection, or when you simply prefer predictability in your monthly budget. An adjustable rate mortgage may make sense if you plan to sell or refinance within five to seven years, since the initial rate is usually lower. But if there is any chance you will stay longer, a fixed rate eliminates the risk of payment increases when the ARM adjusts.
On conventional fixed rate mortgages, there are no prepayment penalties. You can make extra payments toward principal at any time, make biweekly payments instead of monthly, or pay off the loan entirely without any fees. Making just one extra payment per year on a 30-year mortgage can shave roughly four to five years off your loan term. Some non-QM and jumbo fixed rate programs may include prepayment penalties, so always confirm the terms before closing.
Minimum credit score requirements depend on the loan program. Conventional fixed rate mortgages typically require a 620 minimum score, though the best pricing starts at 740 and above. FHA fixed rate loans allow scores as low as 580 with 3.5% down, or 500 with 10% down. VA fixed rate loans have no official VA minimum, though most lenders require 580 to 620. As a broker, I shop lenders with different credit overlays to find the best rate for your specific score.
For 2026, the conforming loan limit for a single-family home is $832,750 in most of the country, including all Arizona counties. In high-cost areas like Orange County, California, the limit is $1,249,125. Loans within these limits qualify for conventional fixed rate financing with standard pricing. If you need to borrow above these limits, you will need a jumbo fixed rate mortgage, which typically requires a higher credit score, larger down payment, and more reserves.
When you go directly to a bank or credit union, you only see that single institution's fixed rate pricing. As a broker, I submit your loan to multiple wholesale lenders simultaneously, each competing for your business. On a fixed rate mortgage, even a small rate difference — an eighth of a percent — translates to thousands of dollars over the life of the loan. I have access to lenders that offer better-than-retail pricing specifically through the wholesale broker channel, which means the rate I find for you is often lower than what you would get walking into a bank.
Let Me Find Your Best Fixed Rate
I will shop your loan across dozens of wholesale lenders and show you the best fixed rate options for your situation — no obligation, no pressure, and no cost to you until you decide to move forward.
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1530 E Williams Field Rd Ste. 105, Gilbert, AZ 85295