What is a conventional mortgage?
Conventional mortgages are mortgage arrangements that meet the standards set in place by a government. In the United States, the terms and conditions that are associated with such mortgage options as Freddie Mac and Fannie Mae are examples of a conventional mortgage. Generally, a conventional mortgage will account for a high percentage of the mortgages that are granted in a given calendar year, often anywhere from a third to half of the total mortgages written during the period. The conventional mortgage may be written as either a fixed rate mortgage (FRM) or carry a variable rate structure. With the FRM, interest rates are fixed with a monthly principal and interest payment making up the total due for each monthly installment. The monthly payments will remain the same amount for the duration of the mortgage. When a variable interest rate is applied to the conventional mortgage, the exact amount of the payments will vary over time, based on the current standard rates of interest that m
