Legal Definitions - FRM

Definition: FRM stands for fixed-rate mortgage. It is a type of mortgage where the interest rate remains the same throughout the life of the mortgage, regardless of market conditions.

Example: If a borrower takes out a 30-year FRM with an interest rate of 4%, the interest rate will remain at 4% for the entire 30-year term, even if interest rates in the market increase or decrease.

Explanation: This means that the borrower's monthly mortgage payments will remain the same for the entire term of the mortgage, providing stability and predictability in their budgeting. The example illustrates how the interest rate remains fixed, regardless of market conditions.