Fixed-Rate Mortgage
Also called: fixed rate loan, 30-year fixed
A fixed-rate mortgage keeps the same interest rate for the entire term, so the payment never changes. The 30-year version is a peculiarly American product, and its hidden feature is that it is an option in your favour: if rates fall you refinance, and if they rise you keep the old cheap rate. You pay for that asymmetry in a higher starting rate than an ARM. Over 30 years at typical rates, total interest can approach or exceed the amount borrowed.