Real Estate Term
Fixed-Rate Mortgage
A mortgage with an interest rate that remains constant throughout the term.
What is Fixed-Rate Mortgage?
A fixed-rate mortgage locks your interest rate — and therefore your payment — for the entire term, regardless of what happens in the market. It offers predictability and protection against rising rates, which is why many buyers choose it for budgeting certainty, especially the popular 5-year fixed term. The trade-off is that fixed rates usually start higher than variable rates, and breaking the mortgage early can carry a larger penalty.
Frequently asked questions
Related terms
Variable-Rate MortgageA mortgage where the interest rate fluctuates with market conditions.Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on market conditions.Interest RateThe percentage charged by a lender for borrowing money, typically expressed as an annual rate.AmortizationThe process of paying off a loan over time through regular payments that cover both principal and interest.MortgageA loan used to purchase real estate, with the property serving as collateral.
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