Conventional loans
Follow Fannie Mae or Freddie Mac rules and are not insured by the government. For a main home, a second home or a rental.
Buying a home
Fixed rate loans
A fixed rate mortgage: the same principal and interest payment for the life of the loan.
With a fixed rate, the interest rate is set when you close and does not change. Here is how it works, who it suits, how it compares with an adjustable rate, and which loan programs offer it.
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Pick the one closest to you. A few short questions follow, and a licensed loan officer gets back to you.
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Fidelity Residential · NMLS #103098 · Equal Housing Lender
- Direct, licensed lenderNMLS #103098. Check our licences on NMLS Consumer Access.
- A licensed loan officerA real person reviews your file and answers your questions.
- Fixed and adjustableWe can quote both so you can compare them.
- Apply online or by phoneStart a quote, apply online or call 732-686-9999.
The basics
How a fixed rate mortgage works
The interest rate is set at closing and stays the same until the loan is paid off. Each monthly payment of principal and interest is the same amount, and a little more of it goes to the balance as the years go by.
If your monthly payment also includes property taxes and homeowners insurance held in an escrow account, that part can still change when your tax bill or insurance premium changes.
You choose the length of the loan from the terms the program offers. A shorter loan has a higher monthly payment but less interest paid over its life; a longer loan has a lower monthly payment but more interest paid overall. A loan officer can show you the choices side by side.
Who a fixed rate suits
- You plan to stay in the home for many years
- You want a steady budget with no change to principal and interest
- You would rather not take the chance that rates rise later
A worked example, in words. Say you are buying a home you plan to keep for many years, and you want a principal and interest payment that never changes.
- The program. A loan officer checks which programs fit your down payment, credit, income and the home. Conventional, FHA, VA, USDA and jumbo loans can all be set up with a fixed rate.
- The length. You compare a shorter loan, with a higher monthly payment but less interest paid over its life, with a longer one, with a lower monthly payment but more interest paid overall.
- Points or a credit. Your loan estimate shows whether you pay points at closing to lower the rate, or take a lender credit toward your closing costs for a higher rate. Points pay off only if you keep the loan long enough to earn the cost back through the lower payment.
- The lock. You lock the rate for long enough to reach your closing date, with room for delays.
- After closing. The rate is fixed in your loan documents when you sign. Principal and interest stay the same for the life of the loan; if taxes and insurance are paid through an escrow account, that part can change when those bills change.
The mortgage payment calculator gives a first estimate of the payment using figures you enter; it is an estimate, not an offer.
Compare
Fixed rate or adjustable rate
Both are common. The right one depends on how long you expect to keep the loan and how much change in the payment you can accept.
| Question | Fixed rate | Adjustable rate |
|---|---|---|
| The interest rate | Set at closing and never changes | Fixed for a set number of years, then can go up or down at set times, within limits called caps |
| Principal and interest payment | The same every month | The same during the fixed period, then can rise or fall with the rate |
| Often chosen by | People who plan to keep the home and the loan for a long time | People who expect to sell or refinance before or soon after the fixed period ends |
| Things to weigh | If rates fall later, the only way to a lower rate is to refinance, which has closing costs | The payment can rise after the fixed period, so plan for the highest payment the caps allow |
Programs
Loan programs with a fixed rate
A fixed rate is a feature, not a program of its own. Most of the programs we offer can be set up with one.
FHA loans
Insured by the Federal Housing Administration, with more flexible down payment and credit rules. For the home you live in.
FHA loansVA loans
For eligible veterans, service members and certain surviving spouses, partly guaranteed by the Department of Veterans Affairs.
VA loansUSDA loans
Guaranteed by the U.S. Department of Agriculture for homes in areas USDA maps as rural, within household income limits.
USDA loansJumbo loans
For a loan larger than the conforming limit set each year for the county. Each program sets its own rules.
Jumbo loansRefinancing into a fixed rate
A rate-and-term refinance can replace an adjustable loan with a fixed one, or change the length of your loan.
Refinancing your mortgage
How it works
From quote to closing
Talk and get a quote
A loan officer asks about the home, your savings, income and credit, and quotes the fixed rate options that fit, with an adjustable option beside them if you want to compare.
Apply and send documents
You complete the application and allow a credit report. The automated underwriting findings list the documents your loan needs.
The home is valued
An appraiser values the home, or the program’s automated system may offer another way to confirm the value.
Underwriting and closing
An underwriter checks your documents against the program rules. You review your closing disclosure, and the rate is fixed in your loan documents when you sign.
How to apply for a fixed-rate mortgage
You apply the same way for a fixed or an adjustable rate. The fixed rate is a choice you make along the way, and the rate is fixed in your loan documents when you sign.
- Ask for a quote on a fixed rate, with an adjustable option beside it if you want to compare.
- Get pre-qualified or pre-approved. A pre-qualification is a quick first estimate. A pre-approval goes further: the lender reviews your credit, income, assets and debts before you choose a home.
- Choose the program and the length of the loan. Compare the rate, the costs, points or credits and the APR on your loan estimates for the same program.
- Complete the application and allow a credit report, then send the documents the automated underwriting findings list.
- Lock your rate for long enough to reach your closing date, with room for delays. Our rate lock policy sets out when a lock can be taken.
- Review your closing disclosure, compare it with your loan estimate, ask about anything that changed, and sign.
The full walk-through is in how to apply for a mortgage, and the papers to gather are in the mortgage documents checklist.
What you need to apply
The automated findings list exactly what your loan needs. Most buyers can start with these.
- Recent pay stubs and your W-2 forms
- Tax returns, and if you are self-employed, a year-to-date profit and loss statement
- Bank statements showing the money for the down payment and closing costs
- A gift letter if family is helping with the down payment
- Your signed purchase contract, once you have one
- Photo identification for everyone on the loan
Questions
Common questions about fixed rate loans
Can my monthly payment change on a fixed rate loan?
The principal and interest part does not change. If your payment also covers property taxes and homeowners insurance through an escrow account, that part can go up or down when those bills change.
How do I choose the length of the loan?
Weigh the monthly payment against the total interest. A shorter loan costs more each month and less over its life; a longer loan costs less each month and more over its life. A loan officer can show you both.
What if rates go down after I close?
Your rate stays where it is. To move to a lower rate you would refinance, which replaces your loan and has its own closing costs. See refinancing your mortgage.
Is a fixed rate always the better choice?
Not always. If you expect to sell or refinance within a few years, an adjustable rate may be worth comparing. Ask for a quote on both.
How do I apply for a fixed rate mortgage?
The same way as any mortgage. Ask for a quote on a fixed rate, choose the length of the loan from the terms the program offers, and apply. A fixed rate is a feature, not a program of its own, so most programs can be set up with one, and the rate is fixed in your loan documents when you sign. See how to apply for a mortgage.
What do I need to apply for a fixed rate mortgage?
The same papers as any mortgage in the same program: photo identification, proof of your income, such as pay stubs and W-2 forms or tax returns, and statements for the money you are using for the down payment and closing costs. After you apply, the automated underwriting findings list the documents your loan needs. See the mortgage documents checklist.
Should I get pre-approved first?
It helps when you are buying. A pre-qualification is a first estimate of what you may be able to borrow, based on what you tell a loan officer. A pre-approval goes further: the lender reviews your credit, income, assets and debts before you choose a home. Neither one is a final loan approval or a commitment to lend: the home still needs an appraisal, and the full file still goes to underwriting.
When is my fixed rate locked?
When you ask for a lock and your file is ready for one. Our rate lock policy sets out when a lock can be taken and what must be in your file first. Whenever you lock, choose a period long enough to reach your closing date, with room for delays. The rate is then fixed in your loan documents when you sign.
Which loan programs offer a fixed rate?
Most of them. A fixed rate is a feature, not a program of its own: conventional, FHA, VA, USDA and jumbo loans can all be set up with one. Each program has its own rules, and a loan officer can tell you which apply to your loan.
Can I refinance into a fixed rate?
Yes. A rate-and-term refinance can replace an adjustable loan with a fixed one, or change the length of your loan. A refinance is a new mortgage that pays off the mortgage you have, with its own closing costs. See refinancing your mortgage.
Does applying for a fixed rate mortgage affect my credit?
The application includes a credit report, which the lender needs to review your file. If you are comparing lenders, ask each one for a loan estimate for the same program and compare them. Once you have applied, hold off on opening new accounts or buying on credit until after closing.
Do you lend in my state?
Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Ready to compare fixed rate options?
Get a quote, apply online, or talk it through with a licensed loan officer.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.
Reviewed by Robert Shamie, CEO, NMLS #241428 · Last reviewed:
Fidelity Residential (PFN Lending Group, Inc., NMLS #103098) is a direct mortgage lender licensed in 40 states and the District of Columbia, with 26 years in business.