Home / Glossary / Fixed Rate Mortgage
Fixed Rate Mortgage
A mortgage where the interest rate remains the same for the entire loan term.
Definition
A fixed rate mortgage locks in one interest rate for the full duration of the loan, providing predictable monthly payments from the first payment to the last. The most common terms are 15 and 30 years, though some DSCR lenders offer 40-year fixed options. Fixed rate loans protect borrowers from rising interest rates, making long-term financial planning easier. The trade-off is that fixed rates are typically higher than initial ARM rates. For buy-and-hold investors, the payment certainty of a fixed rate mortgage simplifies cash flow projections.
How This Relates to DSCR Loans
Most DSCR borrowers choose 30-year fixed rate loans for payment predictability. Fixed rates make it easier to project long-term DSCR and cash flow.
Related Terms
ARM (Adjustable Rate Mortgage)
A mortgage with an interest rate that adjusts periodically based on a market index after an initial fixed period.
Interest Rate
The percentage charged by a lender for borrowing money, applied to the outstanding loan balance.
Amortization
The process of paying off a loan through scheduled payments that cover both principal and interest over time.
Cash Flow
The net money remaining after all income is collected and all expenses and debt payments are made.
Compare rates from hundreds of lenders instantly. No personal info required.