Fixed-Rate Mortgage

By Michael George · NMLS #2280851

Updated October 11, 2026

A fixed-rate mortgage has an interest rate that stays the same over the loan's term. On a standard fully amortizing fixed-rate loan, the scheduled principal-and-interest payment stays level as the borrower makes the required payments. This provides protection against increases in market interest rates. CFPB mortgage payment explanation

A fixed rate does not freeze every housing cost

The total monthly payment can change when property taxes, homeowners insurance, mortgage insurance, or escrow adjustments change. Special payment structures, such as interest-only periods or balloon payments, also require attention: a fixed interest rate alone does not promise level payments under every loan contract. Review the Loan Estimate and the loan terms. CFPB: why mortgage payments change

Comparing fixed and adjustable rates

An adjustable-rate mortgage can change its rate after an initial period, subject to the contract's index, margin, and adjustment limits. A fixed-rate loan offers rate certainty. Compare actual Loan Estimates, including the rate, APR, loan term, closing costs, and possible payment changes; do not assume one product always has the cheaper starting rate. CFPB Loan Estimate explainer

Refinancing

A rate and term refinance replaces an existing mortgage to change its rate or repayment terms. Falling market rates do not automatically reduce a fixed-rate loan's rate; obtaining a new loan generally involves new eligibility checks and costs.

For eligible VA borrowers, an Interest Rate Reduction Refinance Loan (IRRRL) can replace an existing VA-backed ARM with a fixed-rate VA loan. The new fixed rate may be higher than the old ARM rate, but other IRRRL requirements still apply, including cost recoupment. An IRRRL is a VA program, not a Fannie Mae refinance. VA IRRRL overview; 38 CFR 36.4307; VA recoupment guidance