Thirty-Year Fixed Rate Mortgage

The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Twenty-Year Fixed Rate Mortgage

This loan is fully amortized over a 20-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate-and you’ll own your home ten years earlier. The disadvantage is that, with a 20-year loan, you commit to higher monthly payments. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 20 years. For specific details and early-payoff customization, please visit our “Mortgage Calculators” link in the left-hand column, and then select the “Early Payoff” calculator. The 30-year fixed-rate approach is often safer than committing to a higher monthly payment; however, the difference in interest rates can provide large long-term savings.

 Fifteen-Year Fixed Rate Mortgage

This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate-and you’ll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to higher monthly payments. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. For specific details and early-payoff customization, please visit our “Mortgage Calculators” link in the left-hand column, and then select the “Early Payoff” calculator. The 30-year fixed-rate approach is often safer than committing to a higher monthly payment; however, the difference in interest rates can provide large long-term savings.

Ten-Year Fixed Rate Mortgage

This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate-and you’ll own your home in one-third of the time. The disadvantage is that, with a 10-year loan, you commit to higher monthly payments. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 10 years. For specific details and early-payoff customization, please visit our “Mortgage Calculators” link in the left-hand column, and then select the “Early Payoff” calculator. The 30-year fixed-rate approach is often safer than committing to a higher monthly payment; however, the difference in interest rates can provide large long-term savings.

Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)

These increasingly popular ARMS-also called 3/1, 5/1, or 7/1-can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a “5/1 loan” has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. Because Starwest Mortgage Corp. does not use prepayment penalties, this loan product is a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.