Fixed rate mortgage interest rate and monthly payment is always fixed for the duration of the mortgage loan. Some of the common mortgage terms are 10, 15, 20 and 30 years. In recent years, some lenders offer conditions which have already depreciated by 40 and 50 year mortgage terms.

Adjustable (Variable) Mortgages

Adjustable rate mortgages or variable interest rate is fixed for an agreed period. After the expiry of that time, it will periodically adjust up or down based on levels of market index. These indices are the prime rate, the London Interbank Offered Rate, and T-Bill (Treasury index).

Mortgage: Good Credit Bad Game

Lenders refer to credit reports of debtors’ and credit scores when approving a mortgage application. The best (highest) score, the better the rate a borrower can get. Lower credit scores mean, however, a higher risk for the lender, so mortgage lenders require higher interest rates to compensate for the increased risk.