Fixed loans are all about peace of mind. You never have to worry about the principal and interest payment adjusting depending on the market because the rate never changes!
Fixed rate mortgages are amortized – meaning that the amount of your payment applied to principal increases over time. This is good because it means the amount you owe will steadily decrease. However, it is important to remember that in any fixed rate loan, during the first half of the term your payments are predominantly made towards interest. Therefore, you won’t see the loan balance drop dramatically until later into the loan term.
Fixed loan terms usually are available in 30, 25, 20, 15, and 10 year terms. Most people who take 30 year fixed loans do so for the sake of a lower payment and better monthly cash-flow. People who use shorter term structures are typically more interested in faster payoff.