Conventional Fixed Rate Mortgages

A Conventional Fixed Rate mortgage follows the guidelines established by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans and package them into securities and sell the securities to investors. Thus, Fannie Mae and Freddie Mac provide an on-going flow of funds for home loans that results in easily accessible loans for all Americans.

The Fannie Mae and Freddie Mac guidelines establish the maximum loan amount and the underwriting parameters.  The maximum loan amount is the same for both a fixed rate and adjustable rate mortgage (ARM). The current maximum conventional fixed loan amount is $424,100.

A Conventional Fixed rate mortgage has an interest rate that is locked for the length of the loan. One of the most popular fixed rate mortgage terms is a 30-year fixed mortgage. However, there are other common loan lengths as well, such as, 20-year, 15-year and 10-year.   Historically, the shorter the fixed term, the lower the interest rate. Conforming fixed rate mortgages are available on a primary residence, a second or vacation home and even an investment property.