Fixed Rate Mortgages Key Features 30 year fixed   15 year fixed   Advantages Monthly payments are fixed over the life of the loan   Interest rate does not change   Protected if rates go up   Can refinance if rates go down   Disadvantages Higher interest rate   Higher mortgage payments   Rate does not drop if interest rates improve   Adjustable Rate Mortgages (ARM) Key Features 10/1 ARM   7/1 ARM   Advantages Lower initial monthly payment   Rates and payments may go down if rates improve   Disadvantages More risk   Payments may change over time     © 2008 Finance Home America, Inc.