Mortgages are simpler than the paperwork suggests. Three choices set your payment: the rate type, the term and whether you buy the rate down. Everything else is detail.

Fixed or adjustable

A fixed rate never changes — you know your payment for thirty years. An adjustable rate (ARM) starts lower, typically for five or seven years, then resets with the market. If you are confident you will sell or refinance within the fixed period, an ARM can save real money. If you are not, pay for the certainty.

Fifteen or thirty years

A fifteen-year loan has a lower rate and builds equity twice as fast, but the payment is about 45% higher. Most buyers take thirty years and make extra principal payments when they can, which keeps the flexibility.

The buy-down

Paying points — 1% of the loan per point — lowers your rate, usually by about 0.25% per point. It pays off if you keep the loan for more than five or six years. Sellers can pay points on your behalf as a closing concession, which is often a smarter ask than a price reduction.

Try it yourself

Every property page on this site has a mortgage calculator. Change the rate by half a point and watch what happens to the payment; that is the difference a good broker makes. We work with three local lenders and will introduce you to all of them.