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Information About Fixed-Rate Loans


The Spire

Fixed-rate loans, financing options that do not vary over their term, are very popular with homeowners for several reasons. Unlike rent, which may be changed by your landlord with little notice, fixed-rate loans remove uncertainty about monthly housing expenses, as it is held constant over the life of the loan. Homeowners with fixed-rate loans also do not have to worry about payments increasing if interest rates rise, as may be the case with other loan products.

An amortization schedule shows how much of each payment is applied toward both the interest and the principal, or money borrowed to buy your home. As the loan matures, less goes towards interest, and more goes toward the principal.

Fixed-rates are Typically Offered in 15 or 30-year Options

30-year terms generally require a higher interest rate than a 15-year term, as a lender or servicer’s funds are allocated for a longer timeframe. Further, as payments are stretched out for 360 payments, they are considerably smaller than a 15-year term of only 180 payments.

A 15-year mortgage provides the borrower with a lower interest rate and also allows the borrower to pay considerably less in interest over the course of the mortgage. However, some homeowners prefer the cash flow flexibility of a longer-term as payments are lower.

30-Year Loan

  • Higher interest rate than 15-year loans or other shorter-term loans
  • Consistent interest rate
  • Consistent monthly payments to make budgeting easier
  • 360 equal payments with an ever-decreasing interest portion and ever-increasing principal portion with each monthly payment
  • The interest cost to the borrower may be significant over the course of the entire 30 years

15-Year Loan

  • Lower interest rate than 30-year loans
  • Consistent interest rate and monthly payments to make budgeting easier
  • 180 equal payments with an ever-decreasing interest portion and ever-increasing principal portion with each monthly payment
  • Higher monthly payments can be more difficult to manage for some borrowers
  • Interest cost to the borrower is significantly lower to the borrower over the course of the loan compared to a longer-term option

A Lending Hand for Financing Home Mortgages

Spire Financial (A Division of V.I.P. Mortgage, Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.