Fixed rate mortgages are the common method for purchasing homes with an interest rate that stays the same throughout the loan. These loans often are made for 15, 20, or 30 years, and while the monthly payments never change, the monthly payments go more towards interest at first, increasingly going towards the principal over the life of the loan. This is in contrast to adjustable rate mortgages (ARM) whose interest rates change at different intervals over the life of the loan and usually last less than 10 years.
[Last updated in December of 2021 by the Wex Definitions Team]