This "traditional" type of loan maintains its original interest rate throughout the entire life of the loan. Fluctuations in market rates, over the term of your loan, won't have any impact on the amount of interest you pay because that rate is already "fixed." A Fixed Rate Mortgage loan may be a good choice if you:
- Want the security of knowing your interest rate will not change, nor will your monthly payment, unless property tax and insurance amounts change
- Plan to stay in this home for several years
Fixed rate Mortgage Loans come in various terms such as 10, 15, 20 or 30 years. In determining the length of your loan, you may want to consider:
- Total amount of interest you want to pay over the course of your loan
- For example, the total cost of a 30-year loan in terms of the interest paid on the loan is higher than the total cost of a 10, 15, or 20-year loan.
- With a 30-year loan, you have the advantage of lower monthly payments due to the longer loan term.
- With a 15-year loan, you have the advantage of repaying the loan more quickly with higher monthly loan payments.
- Your ability to make the monthly payment
- If you can afford to pay more per month, you reduce the number of months you have to pay. Also, choosing a 15-year term will save you thousands in interest charges vs. the typical 30 year term
Another option to decrease the amount of interest you pay is to get a 30-year loan, so you don't lock yourself into higher monthly payments, but pay a little "extra" each month towards the principal when you are able to do so.
10 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
CFCU 10 and Done
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
CFCU 15 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
CFCU 20 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
6 YEAR BALLOON
| Best Choice If:Low rate with the advantage of a 30 year amortization. | Advantages:Consistent monthly payments. | Disadvantages:Outstanding principal balance must be paid in full at the end of 6 years. |
CFCU 30 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
10 YEAR BALLOON
| Best Choice If:Low rate with the advantage of a 30 year amortization. | Advantages:Consistent monthly payments. | Disadvantages:Outstanding principal balance must be paid in full at the end of 10 years. |
