Program Summary: A fixed-rate conventional mortgage is the most common type of home loan in the U.S. and is ideal for borrowers who want consistency and control over their long-term budget.
Conventional Fixed Rate Mortgage
What is a Conventional Loan?
A conventional mortgage is a home loan that isn’t insured or guaranteed by a government agency like FHA, VA, or USDA. Instead, it’s backed by private lenders and often conforms to standards set by Fannie Mae and Freddie Mac, two government-sponsored enterprises that help keep the mortgage market stable.
“Fixed-rate” means your interest rate and monthly principal and interest payments stay the same for the life of the loan. Whether you choose a 15-, 20-, or 30-year term, your payment won’t change even if market rates do.
Why Home Buyers Like This Loan
The biggest advantage is stability. A fixed-rate loan offers the peace of mind that your monthly payment won’t increase over time. That consistency makes it easier to plan your long-term budget and gives you a clear path toward homeownership.
What You’ll Need to Qualify
Since conventional loans are not backed by the government, they have stricter qualification guidelines. You’ll generally need:
- A credit score of 620 or higher (the better your score, the better your rate)
- A down payment of at least 3% for qualified borrowers
- A stable income and manageable debt-to-income ratio
- If your down payment is less than 20%, you’ll pay private mortgage insurance (PMI). The good news is that PMI can be removed once you reach 20% equity in your home.
Loan Terms and Options
You can choose from several term lengths. The 30-year fixed is the most common because it offers the lowest monthly payment, but a 15-year term allows you to build equity faster and pay less interest over time. BMC Keystone can help you decide which option aligns best with your goals.
When a Fixed-Rate Conventional Loan Makes Sense
This loan is a great fit if you plan to stay in your home for many years and want predictable monthly payments that fit comfortably within your budget.
Compare Your Options
While a fixed-rate conventional loan is a great all-around choice, it’s not the only one. Adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans each have their own benefits depending on your situation.
We are mortgage brokers, so we can help you explore all your options and find the best loan for your needs.