Fixed interest rate home loans

reduced risk with consistent payments

A fixed interest rate is a rate that remains the same over the life of the loan or mortgage. Your payment will remain unchanged as the interest rate remains the same for the life of the loan. As a result of a fixed interest rate, these loans typically are slightly more expensive than a variable rate because they offer less risk to the borrower and are safeguarded against fluctuations in the market.

With variable interest rate loans or loans whose interest rates change, your interest rate is dependent on the prime rate Since interest rates change constantly as the economy grows and expands and contracts, selecting a fixed interest rate will safeguard your loan from these changes.

Sometimes fixed rates may be applied to the full life of the loan and others, the fixed rate may only apply to a particular period of the loan. For example, some mortgages offer a period of fixed rate and then after that time has expired, the rate becomes adjustable for the remaining balance. These are referred to as “hybrids”.

Fixed interest rates are attractive to borrowers who don’t want their interest rate to change and / or don’t want to worry about their payments increasing over time. As a result, because these times of loans are less risk to the borrower, they often times are offered at a higher rate than other loans. Fixed rate loans offer a borrower one consistent payment over the life of the loan.

Fixed Rate loans

1. Reduces risk to the borrower and keeps the loan payment consistent for the life of the loans

2. Fixed rates can be slightly higher than variable loans

3. Borrowers typically choose for fixed loans during a time of low interest rates

Advantages and Disadvantages

Fixed rate loans are typically offered at a higher interest rates. Typically adjustable rate or variable rate loans offer lower interest rates but during periods of high rates, the rates could increase significantly.

FirstOak Bank loan officers are available to discuss your financial and loans needs in Independence, KS; Frendonia, KS; Elk City, KS; and Pueblo, CO locations. To find a location near you, click here