Mortgage basics
Fixed-rate mortgage
In short
A fixed-rate mortgage keeps the same interest rate — and the same principal-and-interest payment — for the entire term, so it never changes with the market.
In a fixed-rate mortgage, the interest rate is set at closing and does not change for the life of the loan. The principal-and-interest portion of your payment is the same in the last year as in the first.
The trade-off is predictability versus a potentially lower starting rate. A fixed rate protects you if market rates rise, but you don't automatically benefit if they fall — capturing a lower rate later means refinancing.
Taxes and insurance can still move a fixed-rate borrower's total payment year to year, because those are collected through escrow and are outside the loan's fixed rate.
Related
Current as of August 2026.