What is a fixed-rate mortgage?

A fixed-rate mortgage locks in your rate from day one, giving you the certainty of knowing what you’ll pay for principal and interest for the life of your loan. Regardless of whether rates rise or fall after you get your mortgage, your payment stays the same. Fixed-rate mortgages dominated the market, with 9 out of 10 homebuyers choosing this loan type.

We’ll break down some of the most common types of fixed-rate loans, how they compare to adjustable-rate loans, qualification requirements, and more.

Current fixed-rate mortgage rates and types of loans

Curious what interest rate and possible points you can expect to pay on a fixed-rate mortgage loan? Here’s a table featuring the latest rates as of May 6, 2026.

How does a fixed-rate mortgage work?

When you take out a fixed-rate mortgage, you lock in your interest rate at the beginning of the mortgage process. Once you are approved for the mortgage loan, this interest rate will remain the same for your entire loan repayment term, unless you choose to refinance along the way. That means you’ll pay the same every month.

Most fixed-rate mortgages are amortizing loans, which means your monthly payment will cover both your principal and interest. The amount you owe each month for your combined principal and interest payment won’t change, but the amount that covers principal and the amount that covers interest will shift over time.

Note that, in the first few years of making mortgage payments, most of each payment goes toward paying off interest. That’s because your loan balance is still high, so you owe more interest. As you pay down your loan, your loan balance will decrease, and you’ll owe less interest. As a result, more of your payment will go toward the principal.

What’s in your monthly payment

Here is what’s typically included in your monthly mortgage payment:

• Principal. Your principal is the amount you’ve borrowed and must pay back. Every time you make a payment toward the principal, you improve your home equity position, which is the portion of the property you truly own outright.
• Interest. This is what your lender charges you to borrow that money.
• Property taxes. Property taxes are paid to your local government to cover things like public services, infrastructure, and public safety. Your property taxes are typically rolled into your monthly payment and paid via an escrow account.
• Homeowners insurance. Your mortgage lender will require you to carry homeowners insurance to safeguard your home and their investment. If you have an escrow account, the annual premium is divided into monthly payments.
• Mortgage insurance. If you make a down payment of less than 20% on a conventional loan, you’ll have to pay private mortgage insurance (PMI), which will increase your monthly payment. FHA loans have mandatory insurance premiums that may last for the life of the loan, depending on your down payment amount.

How your loan’s balance changes your monthly payment

The balance remaining on your mortgage loan will affect what you pay every month. To better understand this, it’s important to know about amortization. Amortization is the process of paying off your loan through a set schedule of monthly payments that cover both interest and principal. Since interest is calculated based on your remaining balance, your initial payments primarily cover interest when the debt is highest. However, as you steadily pay down the principal, the interest charges drop, allowing a larger portion of each subsequent payment to go toward the balance and accelerating your progress.

By following an amortization schedule, you can track exactly how each payment is split and how your total debt decreases until it is eliminated. It's smart to use an amortization calculator, which can help you plan how much you may need to borrow.

How are fixed-rate mortgages different from adjustable-rate mortgages?

A fixed-rate mortgage loan isn’t your only option. Alternatively, you can choose an adjustable-rate mortgage (ARM). An ARM offers a lower initial interest rate that stays fixed for a specific period before adjusting periodically according to market trends, which can cause your monthly payments to fluctuate. These loans are available across various financing types – including conventional, jumbo, FHA, and VA loans. And they are typically identified by two numbers, such as a 5/1 ARM, where the first digit represents the fixed-rate years and the second indicates how often the rate adjusts thereafter. To offer some predictability, potential savings, and risk tolerance, ARMs include built-in interest rate caps that limit how much your rate can increase during any single adjustment or over the entire lifespan of the loan.

Which loan option is right for you – a fixed-rate mortgage or an ARM? Here’s a table that can help you make a more informed decision:

What are your fixed-rate mortgage options?

If you have decided to get a fixed-rate loan, you have many financing options to choose from. Here’s a quick breakdown of some of the most common loans:

• 15-year or 30-year conventional mortgage. Conventional mortgages are private loans not backed by a government agency, with the 30-year option being the most popular due to its lower monthly payments. A 15-year conventional loan allows you to pay off your debt twice as fast and save significantly on total interest, though it requires higher monthly installments.
• FHA mortgage. Insured by the Federal Housing Administration, FHA loans are designed to make homeownership accessible for those with lower credit scores or smaller down payments. You can qualify with a credit score as low as 580¹ and just a 3.5% down payment, though you will typically need to pay mortgage insurance premiums.
• VA mortgage². These loans are specifically for active-duty service members, veterans, and eligible surviving spouses and are backed by the Department of Veterans Affairs. VA loans offer significant benefits, such as no minimum down payment requirement and the absence of monthly private mortgage insurance (PMI).
• USDA mortgage. Managed by the U.S. Department of Agriculture, these loans help low- to moderate-income buyers purchase homes in designated rural areas. Usually, USDA mortgages require no down payment, provided you and the property meet specific income and location eligibility guidelines. Currently, however, Rocket Mortgage does not offer USDA loans.
• Jumbo mortgage. A jumbo loan is a type of nonconforming mortgage used for high-cost properties that surpass federal conforming loan limits. These loans involve larger amounts and greater risk for the lender, so they usually require a more robust credit history, higher earnings, and a bigger down payment.

Flexible terms through a YOURgage© from Rocket Mortgage

Most of the mortgage types listed above come with a 15- or 30-year repayment term. But Rocket Mortgage offers a special loan that lets you customize your term. It’s called the YOURgage ³, and it stands out as a highly adaptable home loan product designed for those who want to break away from traditional financing constraints. You have the power to define your own repayment period anywhere between 8 and 29 years, allowing you to align your mortgage specifically with your life stages or retirement plans.

This level of customization offers significant financial advantages, particularly for homeowners with strict budgeting goals. By tailoring the length of the loan, you can effectively manage your monthly cash flow while simultaneously targeting a specific payoff date. What’s more, because these loans come with a fixed interest rate, you are shielded from market fluctuations. This ensures that your principal and interest payments remain stable and predictable throughout the entire duration of the loan, providing long-term peace of mind.

The YOURgage also offers several strategic ways to save money over time. For instance, opting for a shorter term length can drastically reduce the total amount of interest paid over the life of the loan, potentially saving you thousands of dollars. And borrowers who can make a 20% down payment may bypass private mortgage insurance altogether. This combination of fixed rates and custom terms makes it a unique tool for those looking to optimize their home equity.

Starting the journey toward a YOURgage is a straightforward process that closely mirrors a conventional mortgage application. After you determine your ideal term length using online calculation tools, you simply provide standard financial documentation such as tax returns, pay stubs, and bank statements for verification. Once the application is approved and the loan is finalized, you will transition into a regular monthly payment schedule. Because the structure is so transparent, you will know exactly when your home will be fully paid off from the very first day.

Qualifying for a fixed-rate mortgage

Every lender has different standards for approving a mortgage. Still, it’s wise to have a better idea about what to expect moving forward. The steps to qualify for a fixed-rate loan are like those required to qualify for a mortgage in general.

Determine how much you can afford

The first step toward getting a fixed-rate mortgage is figuring out what you can afford. For example, to get a conventional loan, you’ll need a down payment of at least 3% the purchase price. If you’re purchasing a $350,000 home, that means you’ll need at least $10,500 to make a down payment. The other major upfront cost of buying a home is closing costs, which range from 3% – 6% of the purchase price.

Underwriting comes into play here. Underwriting is the process by which your lender verifies your financial situation before choosing whether to approve your loan application. The lender's underwriter will carefully check your documents and details of your earnings, assets, debts, credit, and the property you're applying to purchase.

You can use this home affordability calculator from Rocket Mortgage to get an estimate of what may work for you.

Review your credit history

Your credit report and financial history also will affect your eligibility for a fixed-rate mortgage – as well as the terms you’re offered. During underwriting, your lender will evaluate your credit score to determine your overall creditworthiness as a borrower and to set your interest rate based on your history of managing debt. To get a conventional loan, you’ll typically need a credit score of at least 620. FHA loans come with slightly lower credit requirements. To get an FHA loan with Rocket Mortgage, you’ll need a credit score of at least 580.

At the same time, your lender will calculate your debt-to-income ratio (DTI) by comparing your monthly debt obligations to your gross monthly income to ensure you can comfortably afford the new mortgage payment.

Find a lender

Many different banks and lenders offer mortgages, though each set their own eligibility requirements. Since a mortgage is a long-term financial commitment, you’ll want to choose a lender that’s reputable and trustworthy and that can meet your financial needs. You can reach out to Rocket Mortgage if you’re interested in a fixed-rate mortgage or unique products like the YOURgage program, allowing you to bypass standard 15- or 30-year constraints and select a custom fixed-rate term that fits your specific financial timeline.

Get preapproved

A preapproval letter from a lender will tell you how much they estimate you can borrow to buy a home. While this is not a guaranteed offer, preapproval gives you a ballpark range of how much you can afford to spend. It also shows sellers that you’re serious about buying and likely can secure financing.

Choose your loan terms

You’ll need to decide between a 30-year loan term and a 15-year loan term. A longer term can help you keep your monthly payment low but will cost you more interest overall. A shorter term can help you save on interest, but you’ll need to be able to afford a higher monthly payment. Loan terms also vary depending on the lender, and one lender might offer you a lower interest rate than another. Shop around and compare offers so you can choose the loan terms that fit best for you.

Lock your interest rate

If you’ve chosen your lender and you’re happy with the interest rate they’ve offered you, then you might decide to get a mortgage rate lock. A rate lock secures your interest rate while you close on the home. That way, if interest rates increase between the offer and closing, you’ll get to keep the original lower rate.

Close on your loan

During the underwriting process, your lender will review your finances to confirm that you can afford your mortgage. If everything checks out, you’ll be cleared to close on your house.

Closing, also called settlement, is the final stage of your home-buying journey. This is when homeownership is legally transferred from the seller to you and the mortgage agreement is signed. This process can span several weeks or months as various administrative steps are completed, eventually leading to your lender providing an official “clear to close” approval. On closing day, you’ll sign all the documentation, make your down payment, pay your closing costs, and officially close on your mortgage.

The bottom line: A fixed-rate mortgage can provide predictability

A fixed-rate mortgage can help you budget for the future and provide the certainty of more predictable monthly payments. That’s because your interest rate is set when you take out the loan and never changes. If you lock in your rate when interest rates are low, you won’t be affected by changes in the market. But even if interest rates drop in the future after taking out a fixed-rate loan, you can still refinance to score a lower rate.

If you’re ready to buy a home, you can apply for preapproval for a loan with Rocket Mortgage today.

¹ To qualify for this offer, you must meet all standard FHA eligibility requirements. In addition, your total mortgage payment, including taxes and insurance, cannot exceed 38% of your income, your debt-to-income (DTI) ratio cannot exceed 45%, and you must have 12 months of verifiable housing history immediately prior to your application, no late payments 30 days or greater in the last 12-months, and no derogatory marks on your credit report. Not available on jumbo loans. Asset statements may be needed, no more than 1 day of non-sufficient fund fees are allowed in the most recent 2 months prior to application. Additional restrictions/conditions may apply.

²  Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

³  Not available on FHA, VA or adjustable-rate mortgages. Available for fixed rate conventional products only.