What is a 30-year fixed-rate mortgage?

One of the most important decisions you make when buying a home is choosing the type of mortgage you’ll use to finance the purchase. There is a variety of loan options offered to different types of borrowers, and the mortgage that’s best for you will depend on your goals and financial situation.

The 30-year fixed-rate mortgage is by far the most popular loan option chosen by home buyers. But like all types of home loans, the 30-year fixed-rate mortgage comes with its own set of pros and cons that you’ll need to consider to determine if it’s right for you. Let’s take a deeper dive into what a 30-year fixed rate mortgage is, how it works, and how it compares to other loan options available.

How does a 30-year fixed mortgage work?

A 30-year fixed-rate home loan is a mortgage that you pay off with interest over the course of 30 years with scheduled monthly payments. With a fixed interest rate, your mortgage rate gets set when you close on the loan and remains the same for the entire span of the repayment period. This leaves you with predictable monthly payments and can help you plan your budget for the long term.

The alternative to a fixed-rate mortgage is an adjustable-rate mortgage (ARM). With an ARM, your rate starts off as fixed for an introductory period and then adjusts at a regular interval. This can cause your monthly payments to fluctuate and likely increase.

The alternative to a 30-year fixed-rate mortgage is a 15-year fixed-rate mortgage. With a loan term that’s half as long, you can save big on interest. However, you’ll have to be able to afford higher monthly payments.

In most cases, a 30-year fixed-rate mortgage is a conventional loan. This means the loan is not backed by any government program. However, it’s also possible to get a 30-year fixed-rate government-backed loan. FHA, USDA, and VA loans are all insured by the government, which allows lenders to loosen eligibility requirements. If you meet conventional loan requirements, they can be cheaper than government-backed loans.

Rocket Mortgage^® does not offer USDA loans at this time, but we’re here to make sure you’re aware of your options.

How amortization works for a 30-year fixed mortgage

Amortization is the process of paying off your mortgage in regular payments over time. Let’s take a look at each of the components that make up your monthly mortgage payment.

• Principal: The principal is the original amount you borrow from a lender to purchase your home. So, if you buy a $300,000 home, make a 20% down payment of $60,000 and borrow the remaining amount, your principal would be $240,000.
• Interest: Interest is what the lender charges for letting you borrow money. Lenders calculate mortgage interest as a percentage of your principal. This rate may be variable or fixed. When you first start paying off your loan, most of your loan payment goes toward interest. As you continue make payments, more will go toward chipping away at interest.
• Escrow: Escrow is money put aside that a third party uses to pay costs on your behalf. Property taxes and homeowners insurance are the primary expenses handled through an escrow account.
• Mortgage insurance: Mortgage insurance protects the lender if you stop making payments. The cost can depend on your loan type, loan amount, credit score, and down payment. With a conventional loan, you can avoid paying for private mortgage insurance (PMI) by making a down payment of at least 20%. FHA loans require mortgage insurance regardless of your down payment.

Your lender will provide you with an amortization table showing your payment schedule and how much of each payment will go toward principal and interest.

You can use our amortization calculator to see what a payment schedule would look like for a mortgage with different interest rates and loan amounts. 

Factors that impact 30-year fixed mortgage rates

Several factors determine your mortgage rate and can impact the amount you’ll pay. They include:

• Credit score: Lenders use your credit score to gauge how you’ve handled debt and how much risk you pose as a borrower. The credit score you’ll need to buy a house type of mortgage you’re pursuing. To get a conventional loan, you’ll typically need a credit score of at least 620.
• Down payment: Lenders usually offer a slightly lower interest rate to buyers with a larger down payment, resulting in a lower loan-to-value ratio. A higher down payment will mean lower monthly payments throughout your repayment term. To get a conventional loan, you’ll need a down payment of at least 3%.
• Economic factors: The state of the market when you take out your mortgage will also affect your interest rate. Mortgage rates are based in part by the federal funds rate set by the Federal Reserve.
• Location: Interest rates may vary somewhat based on state laws and regulations in the area where your home is located.
• Loan type: Certain loans come with a more competitive interest rate than others. For example, VA loan rates are often lower than conventional loan rates.
• Loan term: Loans with a shorter loan term typically have lower interest rates but higher monthly payment. Loans with longer terms have higher interest rates but lower monthly payments.

Mortgage interest rates fluctuate all the time based on market activity. A fixed-rate mortgage means your rate is locked in for the life of the loan, as opposed to an adjustable-rate mortgage where your rate rises or falls with the market.

How often do rates change?

The interest rates on 30-year fixed-rate mortgages change frequently. A few factors influence those changes, including:

• The federal funds rate: The Federal Reserve decides the federal funds rate, which is the rate financial institutions pay to borrow money.
• The financial markets: When financial markets are down, mortgage rates tend to be lower. The opposite is also true. When financial markets are up or there’s a rise in inflation, rates tend to increase.

It’s possible that interest rates will increase in the time between when you start looking for a house and when you get final approval for your mortgage. If you’re worried this might happen, you can pay extra for a rate lock.

Types of 30-year fixed-rate mortgages

There are several different types of 30-year fixed-rate mortgages and each comes with pros and cons. Finding the right type of financing will help you better afford the home you want.

Here are some types of mortgages you might consider.

Conventional 30-year fixed-rate mortgage

Conventional loans are split into two categories: conforming and nonconforming loans. Conventional conforming loans meet the regulations for sale to Freddie Mac or Fannie Mae. Conventional nonconforming loans, on the other hand, don’t satisfy these guidelines.

Conventional loans have qualification requirements that vary by lender. They usually have stricter rules than government-backed loans, such as FHA loans. Typically, you need a minimum credit score of 620 and debt-to-income ratio (DTI) of 50% or lower.

Conventional loan interest rates vary daily, but they’re usually slightly higher than rates on government-backed loans.

FHA 30-year fixed-rate mortgage

The Federal Housing Administration, which works under the Department of Housing and Urban Development (HUD), guarantees FHA loans. So, the FHA protects the lenders in case you default on the loan. Because of the reduced risk, lenders can loosen eligibility requirements.

With some lenders, you can qualify for an FHA loan with a down payment as small as 3.5% and a credit score as low as 580. Your lender may also want evidence of steady employment and a debt-to-income ratio below 50%. While FHA loans are easier to qualify for, you’ll have to pay a mortgage insurance premium (MIP) if you finance your home purchase with an FHA mortgage.

VA 30-year fixed-rate mortgage

VA loans are backed by the Department of Veterans Affairs (VA). Like FHA loans, the government backing allows lenders to loosen eligibility criteria. You’ll need a VA Certificate of Eligibility (COE) proving you qualify, though. Active-duty military members, veterans, surviving military spouses, and members of the National Guard and Army Reserve are all eligible if they meet certain requirements.

VA loans have generally lenient credit requirements, low interest rates and no minimum down payment requirement. Borrowers also don’t have to pay mortgage insurance. However, keep in mind that VA terms and rates vary among lenders.

Jumbo 30-year fixed-rate mortgage

Jumbo mortgages are non-conforming loans, meaning they can exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA).

A conforming 30-year fixed mortgage can only offer a loan amount within the conforming loan limits. A 30-year fixed jumbo loan, however, can offer you more money if you’re able to qualify. Before approving a jumbo loan, a lender may require a home buyer to have additional cash reserves. 

Pros and cons of a 30-year fixed mortgage

Just as every other type of home loan has benefits and drawbacks, so does the 30-year fixed-rate mortgage. Take a look below at the breakdown of pros and cons that come along with this loan program.

Pros 

30-year fixed-rate mortgages are the most popular loan option among home buyers. Here are some of the advantages they provide.

Lower monthly mortgage payments

A 30-year mortgage spreads out the cost of your home over the 30-year term, giving you additional time to pay the loan back. As a result, you make a lower monthly payment than you would with a 15-year or 20-year mortgage for the same property.

Let’s say you’re buying a $400,000 home with a 10% down payment and a 30-year fixed-rate mortgage with a 6.5% interest rate. Your monthly payment would be $2,528. If your loan term were 15 years instead of 30, your monthly payment would be $3,894.

More flexibility in repayment

Some lenders allow you to make extra principal-only payments every month, helping you save money in the long run by reducing the amount you pay in interest. However, some lenders charge a prepayment penalty if you pay off your mortgage early. Rocket Mortgage doesn’t charge any penalties for prepayment.

Ability to afford a more expensive home

When you choose a 30-year term loan, you may be able to purchase a more expensive home. That’s because spreading your payment over a longer term gives you a more affordable monthly payment, allowing you to borrow more. It also means that a smaller portion of your monthly income has to go toward your mortgage, which reduces your DTI and helps you qualify for a bigger loan.

For example, a lender may allow someone with a 15-year term to borrow $140,000. But someone borrowing on a 30-year term may be able to borrow $300,000. You can use your mortgage calculator to help you figure out how large of loan you can afford with a 30-year fixed-rate mortgage.

Cons

A 30-year fixed-rate mortgage might not be the best choice for everyone. Consider the following potential drawbacks.

More interest paid over time

A 30-year mortgage will likely come with a higher interest rate than a shorter-term loan. That’s because it takes longer for a lender to be reimbursed for the loan. Lenders charge a slightly higher interest rate to help minimize any potential loss from unexpected inflation during the loan term. With a 30-year mortgage, you’re also paying interest for twice as many years as a 15-year mortgage, which increases the overall cost of your loan. 

For example, let’s say you get a $350,000, 30-year fixed-rate mortgage with a 6% interest rate. Over the course of your loan, you’ll pay $446,406 in interest. If you get a 15-year fixed-rate mortgage with that same loan amount and interest rate, you’d pay $198,798 in interest - saving you $247,608 overall.

Longer payoff time

A 30-year mortgage is the longest mortgage term that most lenders offer. That draws out your repayment period, meaning it will take that much more time to pay off your mortgage. It also means you’ll need to budget to be making mortgage payments for the long term, which could slow down your progress with other financial goals.

Takes longer to build equity

As you pay the principal part of your mortgage, you slowly gain more ownership of your home. This ownership is known as equity, which can be calculated by taking your home’s value and subtracting the money you still owe your lender. It takes a longer time to build equity with a 30-year fixed-rate mortgage. This is because you aren’t paying as much toward your principal balance at first, and you’re spreading out those payments in smaller installments over a longer period.

Latest 30-year fixed mortgage rates

Below are the current mortgage rates and refinance rates offered by Rocket Mortgage as of November 7, 2025.

Is a 30-year fixed mortgage right for you?

A 30-year fixed-rate is the most common loan option and is chosen by 90% of home buyers. If you’re looking for a way to keep your mortgage payments as low as possible and don’t mind paying more interest over the long haul, a 30-year fixed mortgage may be ideal.

As popular as 30-year fixed-rate mortgages are, they’re not the perfect fit for everyone. If you want to pay your mortgage off quickly or want to save on interest, a shorter loan term will be a better option.

Think about your financial situation and your budget before you apply for a mortgage, so you can choose the right loan type for your goals.

FAQ

Here are answers to some common queries concerning 30-year fixed-rate mortgages.

What happens if I pay off a 30-year fixed mortgage early?

Paying off your mortgage early can help you save money, perhaps even thousands of dollars in interest. However, paying ahead of time may not work for you if you have other high-interest debt or your lender charges prepayment penalties. Rocket Mortgage does not charge prepayment penalties.

How do I apply for a 30-year fixed mortgage?

The first step toward getting a 30-year fixed-rate mortgage is reviewing your finances and figuring out what you can afford. Then, you’ll need to decide which loan type best fits your financial situation and apply for preapproval. Once you’ve found the home you want to buy and your offer has been accepted, you can apply for final approval.

What is a rate lock for a 30-year fixed mortgage?

A rate lock allows you to lock in your rate upon mortgage application. That way, if rates increase in between the time you apply for a mortgage and the time you close on the loan, you’ll be able to take advantage of that initial low rate. Rate locks typically last 30 - 60 days.

Is a 30-year mortgage better than a 15-year mortgage?

Both 30-year mortgages and 15-year mortgages have advantages, but the “better” choice depends on your finances. A 15-year loan will have a higher payment each month, but it comes with a lower interest rate and saves you money on interest. A 30-year mortgage gives you a lower monthly payment, but you’ll pay more overall.

Should I refinance my 30-year fixed mortgage?

If you already have a 30-year fixed-rate mortgage, you may want to refinance your mortgage at some point if you can:

• Reduce your interest rate to lower your monthly payments.
• Extend your loan term to lower your monthly payments.
• Borrow money using your equity.
• Switch your interest rate type.

The bottom line: Weigh the benefits and drawbacks of a 30-year mortgage 

A 30-year fixed-rate mortgage can help you score a lower monthly payment and a predictable monthly payment. However, you’ll likely be paying more interest for your home loan. A longer loan term can make your mortgage more affordable as long as you’re comfortable with paying more in the long run. While a 30-year fixed-rate mortgage is the most popular type of home loan, it’s not your only option. Be sure to understand all the different types of mortgages to decide which is best for you.

If you’re ready to find the right loan for your needs, apply online with Rocket Mortgage.

Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.