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Types of Conventional Home Loans - Fixed vs. Adjustable Rate

Conventional mortgages are typically underwritten according to the guidelines set by Fannie Mae and Freddie Mac. These come in two different types: fixed-rate and variable-rate mortgages. With Embrace Home Loans, both mean borrowing with confidence and a process that’s as simple and smooth as possible.

Fixed Rate Conventional Mortgage Loans

A fixed-rate mortgage is perfectly predictable because you never have to worry about your interest rate or your mortgage payments going up. That means they are easy to budget for over the long term (usually 15 or 30 years) and are typically a great choice if you:

  • Need a predictable payment
  • Intend to keep your home for more than five years

Variable Rate Conventional Mortgage Loans


Variable-rate mortgages, also known as adjustable-rate mortgages (ARMs), are more complicated than fixed-rate mortgages. Their initial interest rate will usually be lower than a fixed-rate mortgage. However, the interest rate of the mortgage will change over time, and as a result, your payments may go up or down accordingly. They may be ideal for you if you:

  • Don't expect to own your home for more than five years.
  • Want the lowest initial interest rate possible and are willing to possibly pay higher rates down the road
  • Expect to eventually make a higher salary
  • Expect interest rates to decline

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