 a fixed-rate mortgage (frm), often referred to as a "vanilla wafer" mortgage loan, is a fully amortizing mortgage loan where the interest rate on the note remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or "float". as a result, payment amounts and the duration of the loan are fixed and the person who is responsible for paying back the loan benefits from a consistent, single payment and the ability to plan a budget based on this fixed cost. other forms of mortgage loans include interest only mortgage, graduated payment mortgage, variable rate mortgage (including adjustable-rate mortgages and tracker mortgages), negative amortization mortgage, and balloon payment mortgage. unlike many other loan types, frm interest payments and loan duration is fixed from beginning to end. fixed-rate mortgages are characterized by amount of loan, interest rate, compounding frequency, and duration. with these values, the monthly repayments can be calculated. == overview == unlike adjustable-rate mortgages (arm), fixed-rate mortgages are not tied to an index. instead, the interest rate is set (or "fixed") in advance to an advertised rate, usually in increments of 1/4 or 1/8 percent. the fixed monthly payment for a fixed-rate mortgage is the amount paid by the borrower every month that ensures that the loan is paid off in full with interest at the end of its term. == popularity == the united states federal housing administration (fha) helped develop and standardize the fixed rate mortgage as an alternative to the balloon payment mortgage by insuring them and by doing so helped the mortgage design garner usage. because of the large payment at the end of the loan, refinancing risk resulted in widespread foreclosures. it was the first mortgage loan that was fully amortized (fully paid at the end of the loan) precluding successive loans, and had fixed interest rates and payments. fixed-rate mortgages are the most classic form of loan for home and product purchasing in the united states. the most common terms are 15-year and 30-year mortgages, but shorter terms are available, and 40-year and 50-year mortgages are now available (common in areas with high priced housing, where even a 30-year term leaves the mortgage amount out of reach of the average family). outside the united states, fixed-rate mortgages are less popular, and in some countries, true fixed-rate mortgages are not available except for shorter-term loans. for example, in canada the long
Mortgage