Loan types
Fixed-rate mortgage
A mortgage whose interest rate — and therefore principal-and-interest payment — never changes for the life of the loan, most commonly over a 30- or 15-year term.
What does fixed-rate mortgage mean?
The fixed-rate mortgage is what roughly four out of five Michigan buyers choose, because the payment certainty is worth a lot: your principal and interest are locked for the whole term regardless of what the market does. A 30-year fixed keeps the payment affordable; a 15-year fixed prices lower and cuts lifetime interest by more than half but raises the monthly payment. The trade-off versus an adjustable-rate loan is that you pay a bit more up front for that stability — insurance against rising rates.
Common questions
Is a 30-year or 15-year fixed better?
A 30-year keeps the payment affordable; a 15-year prices lower and saves huge interest but costs much more monthly. Most Michigan buyers take the 30-year for payment safety and prepay when they can.
Can my fixed-rate payment ever change?
The principal and interest won't. But your total payment can shift if property taxes or insurance change, since those are collected through escrow alongside the fixed P&I.
Is a fixed rate better than an ARM?
For buyers who'll stay put, usually yes — it removes the risk of rising rates. An ARM only wins if you're confident you'll sell or refinance before its rate resets.
Related terms