Fixed Rate Mortgage vs. Interest Only Mortgage

A fixed rate mortgage has the same payment for the entire term of the loan. Use this calculator to compare a fixed rate mortgage to Interest Only Mortgage.

The difference between a fixed second mortgage and one with a variable rate is that fixed second mortgage has a fixed rate and is commonly thought of as safer than a mortgage with a variable rate.

The monthly payment on a fixed-rate mortgage never changes.

Option ARM vs. Fixed Rate Mortgage

A fixed rate mortgage has the same payment for the entire term of the loan. The Option ARM uses a low initial rate to calculate your initial minimum monthly payment. Although the interest rate will increase after 1 to 3 months, your low payment will remain fixed for the entire year. This can produce a much lower monthly payment than a traditional fixed rate mortgage, or even an adjustable rate mortgage (ARM).

A fixed mortgage rate is an interest rate that will not change for the term of the mortgage. This is in contrast to a variable mortgage rate which changes frequently based on the prime rate or other benchmark rate.