Compare 15-Year Mortgage Rates for January 2025

But over time, mortgage rates on adjustable rate mortgages increase and so do the monthly payments the homeowner has to make. With a 15-year fixed-rate mortgage the interest rate may start a bit higher than an ARM, but it will stay consistent for the entire term of the loan. A 15-year fixed-rate mortgage offers homeowners the opportunity to build equity faster and save on interest over the life of the loan. This mortgage type is ideal for those who can afford higher monthly payments and want to become debt-free sooner. Total Mortgage has years of expertise in helping homebuyers secure the best 15-year mortgage deals.

You’ll pay off your house in half the time.

But the more widely you cast your nets, the better your chance of landing an ultra-low rate. At the beginning of your loan term, a larger portion of your payment goes toward interest. Toward the end of your term, you finally start paying more toward the loan balance. In fact, your savings could be even bigger because purchase rates are sometimes lower than refinance rates. That’s a big difference — and one that not many homeowners would be willing or able to handle.

Cons of a 15-Year Fixed-Rate Loan

Our mortgage loan officers are dedicated to helping you choose the option that’s best for you. Prequalify to see how much you might be able to borrow, start your application or explore 15-year fixed mortgage rates and features. Bankrate is an independent, advertising-supported publisher and comparison service. We arecompensatedin exchange for placement of sponsored products and services, or when you click on certain links posted on our site. However, this compensation in no way affects Bankrate’s news coverage, recommendations or advice as we adhere to stricteditorial guidelines. A good rate will depend on the current average rate, your credit score, the loan-to-value (LTV) ratio, and more.

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• Though monthly payments are higher, this option accelerates loan repayment and results in significant long-term savings.
• Once the “teaser rate” period ends, your rate will adjust based on the ARM terms you chose, which could cause a big jump in your monthly payment.
• The best way to determine whether a 15-year fixed-rate mortgage makes the most sense for you is to talk to one of our mortgage experts at JVM Lending.
• Mortgage calculators help you get an estimated mortgage rate based on your financial situation.
• When 15-year fixed mortgage rates are low, owning a home seems more affordable.
• With the higher monthly payment on a 15-year mortgage, more of your money goes toward paying off the principal amount of your loan—instead of getting thrown away on interest.
• Deciding between a 15-year refi and increasing payments on your existing loan?
• We recommend evaluating this with one of JVM’s experienced refinance specialists to weigh the pros and cons for your exact situation.

There is a higher monthly payment than a 20- or 30-year loan due to a shorter term. But in reality, it’s much harder to qualify for a 15-year loan because of the higher monthly payments. Once a homebuyer accrues 20% equity in their home, they can petition to have this monthly payment removed from their loan, often by ordering an appraisal to confirm the value of their home. Otherwise, mortgage insurance is automatically removed once you accrue 22% equity in your home. “If you don’t expect to be in your home for a long time and believe that rates are going to decline over the next couple of years, then the ARM is a good mortgage product to start with,” Cohn says. “When rates bottom out, refinancing to the security of a fixed rate makes sense if you think you will be in the home long term.”

• In a bull market, you want to buy the most home you can afford.
• Deciding between a 15- or 30-year-mortgage may not seem like something you want to use a lot of mental energy on when everything else is so overwhelming.
• Locking in the shorter duration of a 15-year mortgage now, especially if you’re in your 40s or 50s, potentially allows you to pay it off by the time you plan to stop working.
• I’m a big fan of Sam, but this is one area where he and I definitely disagree.
• If you’re in your 40s or 50s and buying a home, things get trickier.

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Though we can’t review every available financial company or offer, we strive to make comprehensive, rigorous comparisons in order to highlight the best of them. For many of these products and services, we earn a commission. The compensation we receive may impact how products and links appear on our site. It’s a good reminder that the average rate for various mortgages are just that, averages.

See our other fixed interest rates by loan type

Interest rates on a 15-year mortgage averaged 3.28% to 3.44% in January 2020. Private mortgage insurance is required by lenders when you put a down payment that’s less than 20% of the value of the home. You can get started today or set up an appointment to put together your application at a time that works for you.

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Mortgage rate quotes are estimates that let homebuyers know what sorts of interest rates and APRs (the amount of interest they’ll pay per year, plus the cost of fees) they’re eligible for. A mortgage rate table like the one above lets you compare the interest rates that different companies are offering. Adjust the graph below to see 15-year mortgage rate trends tailored to your loan program, credit score, down payment and location. On the other hand, a 30-year loan (for $250,000) would result in a $1,194 monthly payment—well under the $1,500 maximum.

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• It even creates a mortgage payment schedule for you, which shows you how much principal and interest you pay every month for each loan term.
• As the country plunged into another recession, mortgage rates continued to fall.
• For many of these products and services, we earn a commission.
• As a buyer, you want a monthly payment that leaves enough room in your budget for your other expenses and your savings goals.
• We experienced a mortgage market anomaly where the average 15-year mortgage was much lower than the average 5/1 adjustable rate mortgage.
• The 15-year fixed loan is an alternative option to traditional financing options, including conventional, FHA, VA, and jumbo financing.
• A 15-year fixed-rate mortgage offers homeowners the opportunity to build equity faster and save on interest over the life of the loan.

It just means the bank will own most of your home for a lot longer. That could be plenty for a down payment to move up to a larger home. With the 30-year, you might not accrue enough equity to afford a move-up home, or simply another home in a similar price range.

• A 15 year fixed year mortgage is a loan that will be completely paid off in 15 years assuming all payments are on schedule.
• Because the mortgage is fixed, the monthly payment and interest rate will stay the same for the life of the loan.
• A 15-year mortgage has a higher monthly payment than a 30-year one since the loan needs to be paid off in half the time.
• The argument is essentially that the 30-year fixed mortgage is a bad deal for homeowners and should be avoided at all costs.
• It’s a loan with a repayment period of 15 instead of 30 years and a mortgage rate that tends to be lower than longer-term mortgage rates.
• With insurance and property taxes included, your housing payments should be within 28% of your total income.
• At the beginning of your loan term, a larger portion of your payment goes toward interest.
• Those with stable income and a solid financial foundation are more likely to secure this loan.

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This gives me a little more cushion on my monthly payment as well. With so many people recommending the 15 year mortgage, I am seriously questioning my choices to go with 30 year mortgages. I have 3 properties total, 2 rentals and a personal residence. My idea is that I want to keep the cashflow requirements low so that I can deploy extra cash to investments of my choosing. That may be additional properties or the ability to move and purchase a new primary residence in another city without having to sell my existing.

What is the benefit of a 15-year fixed-rate mortgage?

With forced margin calls at often terrible times, the risk is greater and brokerages generally limit to 50% margin. During this same time we are choosing to do ROTH conversions from pretax 457b accounts into ROTH 457b. $60,000 conversion is $14,400 owed in tax based on 24% bracket. Yours 15 year fixed mortgage rates is a great example of what I’ve been writing about for a while, regarding ARMs resetting to equal or lower rates for the past 40+ years. Excellent article.Per your advice, I refied through Credible.Dropped a whole point for under a $1000 in cost.Also went with a short loan duration also.

What is a 15 year fixed rate mortgage?

If your credit score isn’t as high as it could be, it might be a good idea to work on improving your credit before you apply for a mortgage. The U.S. economy fell into a recession in the early 1990s following a sharp increase in the cost of gasoline and a crisis involving a number of savings and loan associations. By 1992, the recession had ended and the average annual rate on 15-year fixed mortgages was 7.96%.

• That means your monthly payment (not including taxes and insurance) will remain the same, too.
• With the shorter mortgage, you’ll pay $2,500 a month for a total of $450,000.
• Okay, let’s get the most obvious difference out of the way first.
• Don’t be afraid to walk away from your current lender when you refinance.

Compare Fixed Rate Mortgage Loan options

This concept scares off many buyers who may be a good candidates for a 15-year mortgage. Overall, a 15-year fixed rate mortgage can be a good option for those who are looking to save money on interest charges and pay off their mortgage faster. However, it’s important to consider your individual financial circumstances and to speak with a financial advisor to determine if a 15-year fixed rate mortgage is the right choice for you. Many people choose 30-year fixed-rate mortgages because of the smaller payments, which grant greater financial flexibility.

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One way to get the best of both worlds is to start out with a 30-year fixed mortgage then refinance into a 15-year loan if makes sense to do so. The 30-year fixed mortgage folks probably weren’t thrilled either, but at least they could cut their losses or continue to make smaller payments as they assessed the rather dismal situation. Oh, and the 15-year fixed borrower would save nearly $250,000 over the life of the loan thanks to a much lower interest expense. Because principal paydown takes such a long time on a 30-year loan, you might not have enough equity to sell if you only hold for a few years. Personal finance typically evolves from a lower income in your 20s to higher earnings later in your career. In your 20s, saving can seem impossible due to responsibilities like marriage, children or student loans.

Rates on 30-year loans, moving roughly in tandem, finally dipped below 7% in mid-December. That’s good news for potential homebuyers, who have been weathering a storm of high interest rates and low housing stock since at least August. Since this is a fixed-rate mortgage, the interest rate stays the same throughout the life of the loan. That means your monthly payment (not including taxes and insurance) will remain the same, too. The amount of debt you’re carrying can also affect the mortgage rate on your 15-year fixed mortgage loan. If you’re using a large percentage of your paycheck each month to pay off debt and your debt-to-income ratio is 36% or higher, you might get stuck with a high mortgage rate.

With a shorter loan period, buyers pay less in overall interest over the life of the loan compared to the 30-year fixed-rate option. However, savvy clients who invest the savings from their 30-year loans back into the market earn a conservative 5% annually, giving them a higher net worth than those who pursue the 15-year option. Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts.

What is considered a good interest rate on a 15-year mortgage?

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Homebuyers who aren’t interested in making mortgage payments for 30 years in a row can look into getting a 15-year fixed-rate mortgage. While these mortgage products aren’t as common as their 30-year counterparts are, they are a viable alternative that can offer homeowners several benefits. There are a few ways to pay down a 30-year mortgage in 15 years. First, you could consider refinancing your current mortgage into a 15-year fixed mortgage. Another way is to make extra payments towards the principal amount or make biweekly payments equal to one additional mortgage payment per year.

30 year and choice of what to do with the difference in payment with a 15 year is better. Unfortunately, as of today, the 15-year fixed rate mortgage is now the same or higher than the average 5/1 ARM. That said, well-qualified borrowers are still getting much lower rates than average. But even still, taking out a 30-year fixed rate mortgage makes no sense if you plan to sell your home after 10.5 years. Strategically, you want to match your fixed rate with your homeownership tenure to save the most amount of money.

To better understand the eligibility criteria and program details, you can start by speaking to one of our seasoned experts. A 15-year refinance could net you a much lower rate and save you thousands in mortgage interest. As an alternative, you can usually pay down your 30-year mortgage very effectively by putting in a big lump sum or increasing your regular mortgage payments. The benefit to this strategy is that you’re not required to pay extra on your mortgage; you can return to lower monthly payments at any time if money is tight. But with a 15-year mortgage, you’re obligated to make the higher monthly payments or risk your loan going delinquent.

The rates shown above are the current rates for the purchase of a single-family primary residence based on a 45-day lock period. Your final rate will depend on various factors including loan product, loan size, credit profile, property value, geographic location, occupancy and other factors. I’ve covered the housing market, mortgages and real estate for the past 12 years. At Bankrate, my areas of focus include first-time homebuyers and mortgage rate trends, and I’m especially interested in the housing needs of baby boomers. In the past, I’ve reported on market indicators like home sales and supply, as well as the real estate brokerage business.

The 30-year loan would cost $1,432, nearly half the monthly payment of the 15-year loan. While mortgage rates are higher now compared to recent years, 15-year mortgage rates are still lower than those on 30-year loans — though there’s variation from lender to lender. On November 17, 2022, Freddie Mac changed the methodology of the Primary Mortgage Market Survey® (PMMS®). The weekly mortgage rate is now based on applications submitted to Freddie Mac from lenders across the country. But if you decide to take out a mortgage, we recommend getting a 15-year fixed-rate conventional mortgage with at least 10% down (but 20% is better so you can avoid PMI). Just make sure your monthly payment doesn’t go over 25% of your take-home pay.

Check out the latest rates to see how today’s 15-year mortgage rates and 15-year refinance rates compare. A safe rule is that housing shouldn’t take up more than 30% of your monthly budget. Calculate how much money you can afford for housing each month and don’t exceed it.

Paying off a 15-year mortgage could put all your money in home equity. Though it’s possible to borrow against that investment with a home equity loan or line of credit, you’ll have to pay interest on what you borrow. And it’s easier to access money in a retirement account than it is to extract equity from your home. You also might hear that 15-year fixed-rate mortgages are “fully amortizing” loans.

My primary home is also full of 4 tenants/roommates and I’m about to refinance. I ideally will keep this property forever and continue to purchase more, hoping eventually to get into multi-family and/or commercial. For those of you who are accredited, also take a look at CrowdStreet. CrowdStreet focuses primarily on real estate opportunities in 18-hour cities.

• This is the main reason we will often advise opting for a 30-year loan given the market returns will almost always lead to a better outcome for our clients.
• However, in 2024, mortgage rates are finally coming down and the Fed is set to cut the Fed Funds rate by three or more times.
• “Some of the loan-level price adjustments that exist on a 30-year do not exist on a 15-year,” says James Morin, senior vice president of retail lending at Norcom Mortgage in Avon, Conn.
• With a 15-year fixed-rate mortgage you will build equity in half the time it takes with a 30-year mortgage.
• You also might hear that 15-year fixed-rate mortgages are “fully amortizing” loans.
• At the same time, borrowers have decided they wanted to be more conservative and take out a shorter amortizing loan instead.

We are committed to reinventing the mortgage lending model in order to provide outstanding service, low rates, and some of the fastest closing times in the industry. Paying less in interest is the main perk of a 15-year loan, so let’s run the hypothetical numbers to see the difference in interest paid over the course of the loan. Imagine you are taking out a $500,000 loan with a 4.5% fixed interest rate for 15 years. This means a $188,493 payout of interest over the life of the loan. If we look at how a 30-year fixed loan compares, we can see much more in interest is paid.

Fixed rate mortgages for 15 years are less common in the UK than they are in some other countries, but they are available from some lenders—even though we found none with the major banks at this time. Generally, most lenders in the UK offer fixed rate mortgages for either two, three, five or ten-year terms. However, there are a few lenders that offer fixed rate mortgages for 15 years, so it is worth shopping around to find the best deal if you feel that a 15-year fixed-rate mortgage is what you need.

In this article, we’ll explain why, the pros and cons of getting a 15-year mortgage, and whether it could be the right option for you. However, the monthly payments in the case of a 15-year fixed mortgage are comparatively higher than a 30-year fixed-rate conventional loan. This is because repayment terms are longer in the latter case. A 15-year fixed rate mortgage will carry a higher monthly payment but you benefit from lower interest charges, and accelerated repayment of principal loan amount.