
There are several different things to consider when getting a mortgage, including whether you want a fixed-rate mortgage or adjustable rate mortgage. In the end, most people will decide that a fix-rate mortgage is best for them. And many of these homebuyers will get a 30-year fixed rate mortgage.
Since a fixed-rate mortgage is the most common type of home loan, Realtors and borrowers can benefit from understanding the pros and cons of this type of mortgage.
Pros of a Fixed-Rate Mortgage
There are numerous advantages to fixed rate mortgages. They have become the most popular type of mortgage for a very good reason. These mortgages allow someone to buy a home, pay over a very long period of time, and know exactly what their payment will be month-over-month. And even if interest rates rise, the homebuyer’s payment will remain the same.
Some of the top advantages of fixed-rate mortgages include:
- Fixed interest rate: The biggest advantage of a fixed-rate mortgage is that the interest rate does not change. In an environment of rising interest rates, a borrower can save thousands with a fixed-rate mortgage.
- A very clear payment schedule: The interest rate and payment for a fixed-rate mortgages doesn’t change. Borrowers know exactly what their payment will be every month. This is compared to other types of home loans with complex payment schedules and ever-changing interest rates.
- Extra payments permitted: Most fixed-rate loans permit borrowers to pay extra, and even make extra payments, to pay-off the mortgage more quickly without prepayment penalties.
Finally, it’s important to keep in mind that all fixed-rate mortgages are not the same. There are different fixed-rate mortgages to meet different needs. For example, there are different loan terms, typically ranging from 10 – 30 years. Also, there are various mortgage programs, each with advantages and disadvantages.
Cons of a Fixed-Rate Mortgage
Like most everything in life, there are cons to fixed-rate mortgages.
The issue that comes into play is that fixed-rate mortgages start at a higher rate of interest than adjustable rate mortgages, because lenders have to protect themselves against the possibility of interest rates rising in the future.
As a result, some of the significant cons of fixed-rate mortgages are:
- Start at higher interest rate: The interest rate for fixed-rate home loans start higher than adjustable rate mortgages, since lenders have to protect themselves in the event rates start to rise.
- More difficult to qualify: Since the initial payment with a fixed-rate mortgage is typically higher than an adjustable rate mortgage, it can be more difficult to qualify for a loan. This is more applicable when interest rates are high than when they are low.
- Higher Payment: Fixed-rate mortgages usually have a higher initial payment, compared to adjustable rate mortgages, because they begin at a higher interest rate.
- Borrow less: Borrowers may qualify to borrow less with a fixed-rate mortgage than an adjustable rate mortgage, because a fixed-rate mortgage starts with a higher interest rate and higher monthly payment than an adjustable rate mortgage.
- Must refinance to take advantage of lower mortgage rates: Fixed-rate mortgages offer security against rising interest rates. But to take advantage of falling rates, a homeowner must refinance to get a lower interest rate.
Fixed-Rate Mortgages are Best for Most Borrowers
As a general rule, fixed-rate mortgages are the best option for most borrowers. There are pros and cons for fixed-rate mortgages, but for most people, the pros outweigh the cons.
Best of all, fixed rate mortgages protect homeowners against rising interest rates, which can be financially devastating. And if rates drop, homeowners can always refinance to take advantage of the low rates.

The Marimark Mortgage Newsletter will keep you informed with important events in the mortgage industry that could impact your finances.
We especially focus on ways to save money on your current and future mortgages. And, we continually share the information we share with our clients, because we believe informed consumers are the best consumers.
Real estate agents, and other professionals in the industry, will receive an ongoing wealth of information that will help them serve their clients.