A conventional fixed-rate mortgage offers you a set rate and payments that do not change throughout the life of a loan. A conventional loan is paid off over a given number of years, usually 15, 20, or 30.

A portion of each monthly payment goes toward the principal, and the rest is interest. Most lenders roll the cost of insurance and taxes into the monthly payments. During the early amortization period, a large percentage fo the monthly payment is used for paying the interest. As the loan is paid down, more of the monthly payment is applied to the principal.

Fixed rate loans will give you peace of mind if you: want the certainty of a fixed principal and interest payment, want to lock in low rates if you believe rates will likely increase, need fixed payments for a fixed budget, and if you plan on having your potential investment for long periods of time.

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