Fixed-rate mortgages are available in terms ranging as much as thirty years, with the 30-year choice being the most popular, says Kirkland. Paying the loan off over a longer duration of time makes the monthly payment more affordable. However no matter which term you prefer, the rates of interest will not change for the life of the home loan.

Under the terms of an variable-rate mortgage (ARM), the interest rate you're paying may be raised or decreased regularly as rates change. ARMs might a good idea when their rates of interest are particularly low compared with the 30-year fixed, especially if the ARM has a long fixed-rate period before it starts to adjust." Some examples of a variable-rate mortgage would be a 5/1 ARM and or a 7/1 ARM," said Kirkland.

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