Fixed-Rate Mortgages

Fixed-Rate Mortgages

30-Year Fixed-Rate Mortgage

This is the most common mortgage option. The borrower has 30 years to pay it back at a fixed interest rate and the payments stay the same over the life of the loan. Homeowners often choose the 30-year fixed-rate mortgages because the payments are “fixed” and predictable, allowing for easier budgeting and planning. Plus, the payment is lower than that of a 15-year fixed-rate mortgage.

Minimum Down Payment: 3% – 5%

Upside: No surprises! The interest rate stays the same over the entire term.

Downside: If interest rates fall, you could be stuck paying a higher rate. If you find yourself in this situation, refinancing your mortgage may make financial sense.

25-Year Fixed-Rate Mortgage

Instead of the typical 30 year mortgage, a 25-year fixed-rate mortgage can help you build equity in your home faster and perhaps even get a lower interest rate. A 25-year fixed-rate mortgage is fully amortized, or paid off, after 25 years as long as no changes have been made to the terms of the loan. THe obvious downside is slightly higher monthly payment.  Since you are paying off the loan faster than a 30-year mortgage, the monthly payments are higher. However, a 25-year fixed-rate mortgage may be a good compromise for someone wanting to build equity quickly, but not wanting the steep payments of a shorter term loan.

Upside: The interest rate is typically a little lower that the 30-year fixed-rate mortgage and stays the same over the entire term and you pay a lot less in interest over the life of the loan.

Downside: Your payments will be slightly higher than a longer-term loan.

20-Year Fixed-Rate Mortgage

Like the 25-year fixe-rate mortgage, the 20-year fixed-rate mortgage also lets you build equity in your home faster often with a lower interest rate.  

Upside: The interest rate is typically a little lower that the 30-year fixed-rate mortgage and stays the same over the entire term and you pay a lot less in interest over the life of the loan.

Downside: Your payments will be slightly higher than a longer-term loan.

15-Year Fixed-Rate Mortgage

The 15-year fixed-rate mortgage enables you to own your home in half the usual time. Because the loan is shorter, you pay a lot less in the total interest over the life of the loan, often less than half the total interest of a 30-year fixed-rate loan. However, because the term is shorter, the monthly payments are higher. But if you can afford the higher payments, this is a great choice, with lower total costs and a shorter term.

Minimum Down Payment: 3% – 5%

Upside: No surprises! The interest rate stays the same over the entire term and you pay a lot less in interest over the life of the loan.

Downside: Like any fixed-rate loan, if interest rates fall, you could be stuck with a higher rate. Qualification for this type of loan may also be more difficult because the income requirement is often higher. If you find yourself in this situation, refinancing your mortgage may make financial sense.

10-Year Fixed Rate Mortgage

The 10-year fixed-rate mortgage puts equity building in the fast lane. And because the loan is shorter, you pay a lot less in the total interest over the life of the loan, often more than half the total interest of a 30-year fixed-rate loan. However, because the term is shorter, the monthly payments are higher. But if you can afford the higher payments, this is a great choice, with lower total costs and a shorter term.

Upside: Fast equity building and no surprises! The interest rate stays the same over the entire term and you pay a lot less in interest over the life of the loan.

Downside: Like any fixed-rate loan, if interest rates fall, you could be stuck with a higher rate. Qualification for this type of loan may also be more difficult because the income requirement is often higher. If you find yourself in this situation, refinancing your mortgage may make financial sense.


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    Granite Mortgage Company
    3459 Lake Elmo Ave N
    P.O. Box 881
    Lake Elmo, MN 55042

    NMLS# 285381

    Licensed Mortgage Originator in the State of Minnesota
    Licensed Mortgage Broker in the Sate of Wisconsin

    © 2016 Granite Mortgage Company  equal housing lender

    Granite Mortgage Company Logo

    Granite Mortgage Company
    3459 Lake Elmo Ave N
    P.O. Box 881
    Lake Elmo, MN 55042
    Main Number:
    651-459-6000
    Fax Number:
    651-459-6700