This may not always be the best choice, however. If interest rates are very high at the time you take out your loan, with a fixed rate mortgage you'll be stuck with that high interest for the life of the loan (unless you choose to refinance). Conversely, if interest rates are very low, you'll come out the winner with interest rates that will stay low no matter how high interest rates go in the future.

The following are descriptions of the varying lengths and terms of fixed-rate mortgages:

15-Year Fixed-Rate:

• You to pay off the loan in half the time of a 30-year loan.

• Equity builds up more quickly than in a 30-year loan.

• Payments are higher (which may be a problem if you lose your job or become unable to work).
  
  20-Year Fixed-Rate:

• You to pay off the loan in 2/3 the time of a 30-year loan.

• The overall interest paid is considerably less than for a 30-year loan.
  
  30-Year Fixed-Rate:

• The most common choice, especially for first-time homebuyers, as it's the easiest of the fixed-rate loans to qualify for.

• Monthly payments are lower than for 15-year and 20-year loans. This can prove especially helpful if you don't have a lot of "padding" between the amount you can afford to spend & the monthly payment for your desired property.

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