A fixed rate mortgage relates to a real estate loan that features a permanent interest rate that does not fluctuate over the life of the loan.http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm#Annual Fixed mortgage rates offer the benefit of having a set monthly payment that does not change as interest rates change in the economy. Having a set mortgage rate allows more efficient budgeting and minimizes the impact of external economic forces on the amount paid for a home loan. However, a fixed rate does not allow the homeowner to benefit if interest rates decrease over the course of their loan without refinancing.

Fixed mortgage rates are offered on a variety of loan formats. Fixed interest rate loans can be offered for different lengths of time such as 15 years or 30 years. The longer the length of the mortgage, the greater overall cost of the loan. Lower repayment periods lower the amount of interest paid in exchange for higher recurring payments.

A mortgage rate generally refers to the annual percentage rate (APR) of a home loan. The APR includes more than the general interest on the loan. APR also includes fees, credit charges and broker fees according to the Federal Reserve.http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm

Comparing fixed mortgage rates is best done by comparing APR rates offered by various financial institutions such as banks, mortgage companies and credit unions. By using the APR, you can compare the total cost of the loans rather than just the interest rate. As fees can vary between lenders the APR rate can help you truly compare mortgage rates on a more equal basis.http://www.federalreserve.gov/pubs/mortgage/mortb_1.htm

You can review average fixed mortgage rates on financial websites, mortgage-related websites and on some bank sites. The rates published can vary from rates that you will personally be offered. Variance occurs based on the location of the home, your personal financial stability and credit scores and the type of fixed mortgage you want. Rates can be lower based on special programs such as FHA loans or other government-sponsored loan programs.

The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.