Fixed-rate mortgages are a type of home loan where the interest rate remains the same throughout the life of the loan, regardless of market conditions. This means that the monthly mortgage payments remain the same over the term of the loan, making it easier for borrowers in Arkansas to budget and plan for their housing expenses.
For example, let’s say a borrower takes out a 30-year fixed-rate mortgage with an interest rate of 4% to purchase a home in Little Rock. You’ll make the same monthly mortgage payment for 30 years, and the interest rate will remain at 4%, even if interest rates in the market go up or down. This stability makes fixed-rate mortgages popular among homeowners who value predictability and stability in their housing expenses.
Fixed-rate mortgages are available in a variety of terms, including 10-year, 15-year, 20-year, and 30-year terms. The shorter the loan term, the lower the interest rate is likely to be, but the higher the monthly payments will be. The longer the loan term, the higher the interest rate is likely to be, but the lower the monthly payments will be.
For example, a 15-year fixed-rate mortgage may have a lower interest rate than a 30-year fixed-rate mortgage, but the monthly payments will be higher for the 15-year loan because the loan is being paid off over a shorter period of time. On the other hand, a 30-year fixed-rate mortgage may have a higher interest rate, but the monthly payments will be lower because the loan is being paid off over a longer period of time.
If you’re curious about fixed-rate mortgages that offer stability and predictability in housing expenses, let one of Stone Bank’s expert home mortgage lenders help you determine which mortgage option is best for your individual financial situation. Contact Jason Hornsby at jhornsby@stonebank.com or call (501) 435-2064.