Pay Off Your Loan Faster With a 15-Year Fixed
15-year fixed mortgage rates are lower than a 30-year. They can range anywhere from 0.50% to 1% lower in rate than a 30-year fixed mortgage. A 15-year fixed mortgage will pay your home off in half the time as a 30-year loan term. Apply now – you may be surprised at just how low the payment can be for a 15-year mortgage loan.
What Are the Differences and How Does It Work?
A 15-year fixed rate mortgage is a loan with an interest rate that does not change for the life of the loan. For example, on a $400,000 loan with a fixed interest rate of 2.75%, on a 15-year mortgage, the monthly payments will be $2,714. So, as long as you have that loan, the interest rate of 2.75% and monthly payment remains the same.
Who Can Benefit From 15-Year Fixed Mortgage Rates?
15-year fixed mortgage rates are lower than the traditional 30-year fixed mortgage rates. This loan works best for people who want a predictable, set deduction from their monthly income. These are people who don’t like surprises when it comes to monthly bills. Typically, if you plan to stay in the home for over 5 to 7 years and want to gain more equity faster, then the 15-year mortgage is a great plan. You don’t have to worry about the ups and downs of the financial markets – just make your payment and rest assured that your mortgage loan balance is going down fast.
Pros and Cons of a 15-Year Fixed Rate Mortgage
Advantages of a 15-year fixed rate:
- It reduces the amount of interest you pay significantly
- You own your home free and clear a lot quicker
- Interest rates are lower than a 30-year fixed by 0.50% to 1.0%
- A great choice for those looking to retire and keep their monthly expenses to a minimum
Disadvantages of a 15-year fixed rate loan:
- Although the interest rate is lower than a 30-year fixed, payments are generally higher than a 30-year fixed
- You may qualify for less home than you would with an ARM
- Borrowers may end up paying more interest vs. an ARM
- If you choose to sell your home in 5 to 7 years you may lose some of the mortgage interest tax deduction
Ready to Get Started?
Talk to a licensed loan officer about your options — no obligation.