Fixed Rate Loans
Fixed rate loans are fully amortized loans characterized by a fixed interest rate and consistent monthly payment over the life of the loan. Fixed rate loans are typically for 15 or 30 years though they are sometimes marketed in 20 and 10 year increments.
“Biweekly” mortgages also exist where the borrower pays half the payment twice per month, thereby making 26 payments per month (52 weeks in a year divided by two) and effectively paying a “13th month” payment each year. The benefit of this is that it shortens the life of the loan and reduces the total amount of interest paid on the loan. A 30 year mortgage loan paid biweekly would be paid off roughly 2.5 years earlier than scheduled using this payment method.