Define: Fixed-Rate Mortgage

Business, Legal & Accounting Glossary

Definition: Fixed-Rate Mortgage



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Full Definition of Fixed-Rate Mortgage


A fixed-rate mortgage, or FRM, has a fixed interest rate over the duration of the loan. In contrast, the mortgage with a changing interest rate is called an adjustable-rate mortgage, or ARM. The ARM will generally have a lower interest rate than a similar fixed-rate mortgage because the fixed-rate mortgage lacks interest rate risk. The term fixed-rate mortgage is often confused with the term conventional mortgage. Unlike a conventional mortgage, the fixed-rate mortgage does not have to be fully amortizing though this is usually the case. A fixed-rate mortgage can even be a balloon loan. Both the terms fixed-rate mortgage and conventional mortgage are also further confused with the term conforming mortgage. The fixed-rate mortgage can be but is not necessarily conforming.


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Synonyms For Fixed-Rate Mortgage


FRM


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American Psychological Association (APA):
Fixed-Rate Mortgage. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/fixed-rate-mortgage/

Definition Sources


Definitions for Fixed-Rate Mortgage are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 1st April, 2020