Posts tagged Fixed Interest Rate
What is a Fixed-Rate Mortgage?

A fixed-rate mortgage is the simplest and most common mortgage for homebuyers. It simply has a fixed interest rate, that does not go up or down, throughout its lifespan. Since it never changes, a fixed-interest-rate mortgage isn't associated with indexes, margins, floors, or caps. As the interest rate is fixed, the monthly principal and interest payment are the same throughout the mortgage’s lifespan.

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How to Calculate a Fixed Mortgage Rate

Calculating a fixed mortgage rate is relatively simple: You take the annual figure and turn it into a monthly figure. To calculate the monthly fixed mortgage rate, just do the following steps:

  1. change the annual rate to a decimal number by dividing it by 100;

  2. take the resulting decimal figure and further divide it by 12; and

  3. voila!, You have the monthly fixed mortgage rate.

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