Fixed-Rate Mortgages
The interest rate is set at closing and doesn’t change for the life of the loan.
A fixed-rate mortgage locks in your interest rate for the full term, so your principal and interest payment stays the same. It’s a rate structure, not a separate program: conventional, FHA, VA, and USDA loans can all be fixed-rate.
Who may qualify for a fixed-rate mortgage
Any borrower who qualifies for the underlying loan type can choose a fixed rate. It’s often considered by buyers who value a predictable payment, plan to stay a long time, or would find a future payment increase hard to absorb.
- Common terms include 30, 20, and 15 years; availability varies by program and lender.
- USDA guaranteed loans are typically 30-year fixed-rate loans (USDA).
How down payments work
The down payment comes from the loan type, not the rate structure. One difference worth knowing: for a conventional one-unit primary residence, Fannie Mae’s maximum LTV is 97% with a fixed rate and 95% with an ARM (Eligibility Matrix), so the 3% minimum applies to fixed-rate loans.
Credit and income considerations
Lenders qualify you at the fixed note rate. Fannie Mae’s minimum credit score for manually underwritten loans is 620 for fixed-rate and 640 for ARMs (B3-5.1-01).
Shorter terms have higher monthly payments, which raises your debt-to-income ratio even though the rate is often lower.
Mortgage insurance or funding fees
Mortgage insurance or fees follow the loan type: PMI on conventional loans with less than 20% down, MIP on FHA, the funding fee on VA, and guarantee fees on USDA. Shorter terms can reduce some of these costs; for example, FHA’s annual MIP rates are lower for terms of 15 years or less (HUD).
Key advantages
- Principal and interest stay the same for the life of the loan (CFPB).
- Easier long-term budgeting.
- No exposure to rising rates after closing.
- Available across conventional, FHA, VA, and USDA.
Important limitations and risks
- Often a higher starting rate than an ARM’s introductory rate.
- If rates fall, lowering yours means refinancing, which has costs.
- Taxes, insurance, and HOA dues can still raise the total payment.
- Longer terms mean more total interest.
Common misconceptions
MythMy payment can never go up.
RealityPrincipal and interest are fixed, but escrowed property taxes and insurance can change. In Michigan, taxes can also reset after a purchase (see property-tax uncapping).
MythA 15-year loan is always smarter.
RealityIt builds equity faster with less total interest, but the higher payment reduces flexibility. It depends on your goals and budget.
MythFixed rates are only for conventional loans.
RealityFHA, VA, and USDA loans can be fixed-rate too.
Questions to ask before choosing
- How do 15-, 20-, and 30-year terms compare in payment and total interest?
- How does this fixed rate compare with an ARM’s starting rate and worst case?
- What would my full payment be, including taxes, insurance, and mortgage insurance?
- How long do I expect to keep this home and this loan?
- What would it cost to buy down the rate, and how long until that pays off?
Compare Fixed rate with another option.
Open the comparison tool with Fixed rate already selected, or browse all ten guides.
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Adjustable-Rate Mortgages (ARMs)
A fixed introductory rate, then a rate that adjusts on a set schedule.
Read the guide →Loan typesConventional Mortgages
Not government-insured. Usually follows Fannie Mae or Freddie Mac guidelines.
Read the guide →Loan typesFHA Loans
Insured by the Federal Housing Administration. Flexible credit standards.
Read the guide → All guidesMortgage Programs Center
All ten guides and the side-by-side comparison tool.
Compare programs →Fixed rate questions, answered.
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Ask Shane a question →What is a fixed-rate mortgage?
A loan whose interest rate is set when you take it out and doesn’t change for the life of the loan, so principal and interest stay the same.
Can my payment change on a fixed-rate mortgage?
Principal and interest won’t change, but escrowed property taxes and homeowners insurance can, which changes the total monthly payment.
Is a 15-year or 30-year fixed better?
Neither is better for everyone. A 15-year term usually has a lower rate and less total interest but a higher payment; a 30-year term keeps the payment lower and more flexible.
Can FHA and VA loans be fixed-rate?
Yes. Fixed rate is a rate structure that can pair with conventional, FHA, VA, and USDA loans.
Sources
- CFPB: Fixed-rate vs. adjustable-rate mortgages
- Fannie Mae Eligibility Matrix (maximum LTV by occupancy, units, and product; Aug. 5, 2026)
- Fannie Mae Selling Guide B3-5.1-01: General requirements for credit scores
- HUD Mortgagee Letter 2023-05: FHA upfront and annual MIP (rates and duration)
- USDA Rural Development: Single Family Housing Guaranteed Loan Program fact sheet (income, ratios, property, contributions)
- Michigan Treasury / State Tax Commission: Transfer of Ownership Guidelines (uncapping)
Important: This page is educational and general in nature. It isn’t a recommendation, a loan offer, a rate quote, a Loan Estimate, an approval, or a determination of eligibility. Program guidelines, limits, fees, and availability change and vary by lender and investor; actual eligibility, pricing, and terms require a full application and review. References to a program don’t mean Ease Mortgage currently offers it; ask Shane about current availability. Information was last reviewed November 9, 2026. Shane Thomas, Senior Loan Officer | Ease Mortgage, NMLS #444451. Ease Mortgage NMLS #2273319. Licensed in Michigan and Indiana. Equal Housing Opportunity.
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Guides explain how fixed rate loans generally work. Your real options depend on your goals and numbers. Start your secure application, or call Shane to compare them side by side.
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