Best Fixed Rate Mortgage Tips
Combo Loans for Lowest Payments

Discover peace of mind with the best possible fixed rate mortgage combo, one that offers affordability with the potential for fast payoff. You don't have to refinance to accomplish this. In fact, you can do this even if you currently have a 30 or 40 year fixed rate mortgage.

Meet Kate Ford - Your Mortgage Insider

Ask Kate at

Hi, my name is Kate and I'm a retired mortgage broker.

For over 20 years, I helped thousands of people borrow millions of dollars.

I understood the inner working of loan programs and gave my clients these tips that you read at my website.

From time to time, I met borrowers who were overly optimistic about paying off their mortgage. They had the right idea, to be free of the home loan by retirement.

But they often boxed themselves into a corner with a 10 or 15 year term without realistically considering their budget. This led to another refinance (think closing costs and loss of equity) to get back to an affordable payment. To avoid this cycle, I began asking borrowers to consider a combo loan. Before I go any further, let's look at mortgage payments based on different terms.

Compare Fixed Rate Mortgage Payments

Compare the following estimated monthly payments based on borrowing $200,000 at 6%.

  • 40 year fixed rate mortgage - $1100
  • 30 year fixed rate mortgage - $1199
  • 25 year fixed rate mortgage - $1288
  • 20 year fixed rate mortgage - $1432
  • 15 year fixed rate mortgage - $1687

To understand why the payments get more expensive as the payback period gets shorter, take a look at these principles.

Principle One:

  • The longer the term (years), the lower the mortgage payment
  • The longer the term (years), more interest is paid
  • The longer the term (years), the slower the principal is paid off

Tip: If you want the lowest mortgage payment, ask your bank about a 40 year term.

Principle Two:

  • The shorter the term (years), the higher the mortgage payment
  • The shorter the term (years), less interest is paid
  • The shorter the term (years), the quicker the principal is paid off

Tip: If you want the mortgage paid off quickly, 15 year terms are an excellent option, as long as the payment is affordable.

Kate's Secret to Creating a Combo Loan

OK, finally, here is my little secret to creating a combo loan and this is important. The loan you are working with cannot have any prepayment penalties.

  1. First, you'll pick a longer term for the lowest payments, like a 30 or 40 year fixed rate mortgage.
  2. Then you'll make extra principal payments to pay less interest and reduce the principal faster. This is similar to having a 15 year fixed rate mortgage.
  3. But during a month when there's an unexpected expense, you'll have a safety net of the 40 year fixed rate mortgage payment.
Mortgage calculator

Visit my Mortgage Payment Calculator and start combining the best of both worlds, the advantages of a 15 year fixed rate mortgage, rapid principal pay down, with the safety net of the 40 year fixed rate mortgage, lower monthly payments.

Tip: Remember to add 1/12 of the annual insurance premium and property taxes to your payment.

For more help on budgeting mortgage payments, click here for How Much House Can I Afford?

Review Fixed Rate Mortgage Options

Remember Forrest Gump? While they polished their boots together, his friend Bubba described the many ways his mama cooked shrimp. Quoting from the movie Forrest Gump...

There's pineapple shrimp, lemon shrimp, coconut shrimp, pepper shrimp, shrimp soup, shrimp stew, shrimp salad, shrimp and potatoes, shrimp burger, shrimp sandwich...

Just like Bubba's shrimp, the best fixed rate mortgage comes in different flavors... the 30 year fixed rate mortgage, 40 year fixed rate mortgage, a 25 year fixed rate mortgage, 20 year fixed rate mortgage, and the popular 15 year fixed rate mortgage.

Where Do You Want to Go Next?

Adjustable mortgage rates if carefully researched and understood can be appropriate under certain circumstances, depending on your goals.

Residential construction loans are home mortgages designed for building a house. They come with long term and permanent financing options.

The Mortgage Freedom Project by Kate Ford

Learn how to get out of debt and pay off your mortgage early while beating the bank at its own game.

Learn how to pay off your mortgage early and get out of debt!

Suzana writes me after reading The Mortgage Freedom Project...

I'm following your magical steps in hopes of getting my financial situation under control. Thanks for your help!

Go here if you also want to get out of debt and pay off your mortgage early without sacrificing your lifestyle!

Available in Paperback and Kindle format.

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The information you obtain at this site is not, nor is it intended to be, a substitute for personalized professional advice. All numbers are estimated and are for illustrative purposes. Rates, loan programs, and guidelines are published for convenience only, vary with no advance warning, are not guaranteed, and should not be relied upon. You are encouraged to consult a lender for a current rate quote and seek advice from qualified professionals, for example, attorneys, accountants, financial planners, housing counselors, mortgage lenders, and/or real estate agents, regarding your individual situation. Comments and opinions found here are not necessarily those of and its owners.
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