Fixed Mortgages are changing quickly and for the better. Today, there are more choices for the term, rate and lender than ever before. Experts say that it is very unlike that you will be stuck in a deal that is not flexible without a way to lower payment if rates are against you. This is great news for someone trying to borrow a significant amount of amount in today's uncertain economy.

Many first-time homebuyers choose a fixed mortgage because it tends to provide more stability. The mortgage payment each month usually is the same over the whole term of the loan, no matter how long the term is. This allows for predictability in the cost of housing every month. With this type of loan, monthly payment and interest do not ever change.

There are many different packages of fixed mortgages and the most common package is the 30-year mortgage. When you accept a 15 or 20-year fixed mortgage plan, the loan will be paid off faster. With these terms, you can receive a lower rate and be able to build equity in the home faster because you will be paying more towards the principal every month. However, with a 30 year, the monthly payment would most likely be a bit higher. An even newer option today is the 40 or 50- year mortgage. These offer even lower payments each month but do have a higher rate. More of your payment is applied toward the interest and not the principal.

The biggest advantage of these types of mortgages is the payment is the same every month and does not change. This can be a very good option when buying a home if you are planning to stay in it for a long time. You will be secure in knowing what you monthly payment will be because the rate will not be changing. This type of mortgage is different than an ARM (adjustable rate mortgage) in that an ARM has a rate that can change at set intervals. A fixed mortgage can be set and kept before rates rise.

Benefits:

1. Protection from inflation. Your mortgage or payment will not be affected if interest rates begin to increase. This is helpful when owning a home for a long time.

2. Low risk. There is less financial risk when the buyer knows what their monthly payment is going to be, regardless of any market increases in rates.

3. Long-term planning. You will always be able to plan around your mortgage payment and this will be helpful for expenses as well as long-term goals.

4. Stability. Provides stability over a set period of time.

5. Many programs available with 15, 20, 30, 40, 50-year mortgage options.

6. No surprises and very easy to understand.

Disadvantages:

1. The interest rate is usually a little higher.

2. Equity is built at a slower pace because the payment made the first few years goes to the interest and not the principal.

3. The overall balance is larger due to the long amortization term