FRM is a loan where the interest rate on the note remains the same through the term of the loan. Your monthly payments for interest and principal never change. Fixed rate mortgages are the most classic form of loan for home and product purchasing in the United States. The most common terms are 15 year and 30 year mortgages, but shorter terms are available, and 40 year and 50 year mortgages are now available (common in areas with high priced housing, where even a 30-year term leaves the mortgage amount out of reach of the average family).

Fixed rate mortgages are usually more expensive than adjustable rate mortgages (ARM). Due to the inherent interest rate risk, long-term fixed rate loans will tend to be at a higher interest rate than short-term loans.

The fact that a fixed rate mortgage has a higher starting interest rate does not indicate that this is a worse form of borrowing compared to the adjustable rate mortgages. If interest rates rise, the ARM cost will be higher while the FRM will remain the same. Some studies have shown that the majority of borrowers with adjustable rate mortgages save money in the long term, but that some borrowers pay more. The choice of FRM or ARM would need to be made based upon the loan term, the current interest rate, and the likelihood that the rate will increase or decrease during the life of the loan.