A traditional fixed rate mortgage is the most common type of loan. The monthly principal and interest payments never change during the life of a fixed rate loan. Fixed rate mortgages are available in terms ranging from 10 to 30 years and can be paid off at any time without penalty. This type of mortgage is"amortized" so that it is completely paid off by the end of the loan term. There are also "bi-weekly" mortgages, which shorten the loan with a payment every two weeks. Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.

Your monthly payment may vary if you have an "impound account". In addition to the monthly loan payment, some lenders collect additional money each month for the prorated monthly cost of property taxes and homeowners insurance. The extra money is put in an impound account by the lender who uses it to pay the borrowers' property taxes and homeowners insurance premium when they are due. If either happens to change, the borrower's monthly payment will be adjusted accordingly. Overall payments in a fixed rate mortgage are very stable and predictable.