Compare Current 15-Year Mortgage Rates

The changes are based on many different economic indicators in the financial markets. See how much you could qualify to borrow and what your estimated rate and payment would be. It takes just a few minutes and won’t affect your credit score. You might like a 15-year fixed mortgage if you plan to stay in your home for a long time and want to be aggressive about paying off your mortgage. “Yes, your rate will be lower on a 15-year, however, the 30-year gives you more flexibility if you are ever tight on cash,” says Paul Gabrail, host and founder of the YouTube channel Everything Money. “Remember, you can always pay down extra on a 30-year mortgage if you choose.”

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Refinancing a 15-Year Mortgage

If you currently have a 30-year mortgage and have room in your budget for a higher monthly mortgage payment, refinancing to a 15-year fixed-rate loan can make good financial sense. You’ll still have the stability of knowing that the monthly payment won’t change, while getting the benefit of a lower interest rate. Plus, you’ll pay off your home faster, freeing up money for other financial goals like saving for retirement when you do.

Why compare 15-year refinance rates today

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.”

Year Fixed-Rate Mortgage Rate Quotes

A 15-year mortgage, which is often overlooked by first-time buyers, can significantly impact your long-term financial outcomes and nest egg. Your mortgage payments would be higher, yes, but you’d save quite a lot on interest and be mortgage-free 15 years sooner, freeing assets for other investments. I cash-out refinanced last December into a 15-year fixed at 1.875% from a 30-year fixed.

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Typically, homeowners refinance to a 15-year fixed mortgage to save on interest and pay off the loan faster. Refinancing is best when the potential savings outweigh the closing cost fees, which can range from 2% to 6% of the loan’s principal amount. Since monthly payments are much higher with a 15-year mortgage than with a longer term loan, make sure that you can comfortably support the increase.

Top offers on Bankrate vs. national average interest rate

Totally makes sense to go 15 year if one has the means and won’t lose out significantly on cash flow for investing. We may consider a cash out refi or home equity line, but also may just wait until the next home in 3-6 years to have a mortgage. I’m pretty confident the housing market is going to stay strong for years to come. The pace of appreciation will definitely slow, but I’m hard pressed to see negative YoY prices with structurally low supply and structurally high demand. With an ARM, there is almost always a maximum interest rate increase cap for the first year of reset (2% at most usually), and a lifetime cap (3%-4% at most).

• The same loan amount and interest rate over 15 years would cost $332,860 by the end of the term.
• First, you could consider refinancing your current mortgage into a 15-year fixed mortgage.
• The whole point of real estate is leverage and if you lock up more capital in real estate than needed you really end up crippling your investment returns.
• Applying extra payments toward your principal can help you pay down a 30-year mortgage faster without being locked in to a 15-year time frame.
• One of the reasons as to why you might want to consider refinancing your mortgage to a shorter 15 year fixed is to expedite the goal of paying off your home.
• If a small rate increase would mean financial stress for your household, you may be better off with the certainty of a fixed rate loan.
• The 30-year fixed-rate mortgage is practically an American archetype, the apple pie of financial instruments.
• Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor’s degree in English literature.

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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.

Today’s 15-year fixed mortgage rates1

It is not the most optimal time to build due to the expense of materials and labor but we will be able to do some of the work ourselves to save on the costs. So the biggest decision will be to decide how much of the proceeds from the sale of our current home we will put towards the new mortgage and the loan term we will take out. I have changed my tune on a paid off mortgage with interest rates so low.

MoreYou also agree to our Terms of Use, and to our Privacy Policy regarding the information relating to you. This consent applies even if you are on a corporate, state or national Do Not Call list. If you do choose a 15-year mortgage, you should be confident in your job’s stability. If you took a pay cut, could you still pay the bills and the mortgage? Do you have at least six months of emergency money saved up in case disaster strikes? You should also have enough money to contribute to your 401(k) and retirement IRAs.

See our other fixed interest rates by loan type

Most homebuyers can qualify for a 15-year mortgage, depending on their financial situation and lender criteria. Those with stable income and a solid financial foundation are more likely to secure this loan. Additionally, be prepared for emergencies by keeping three months’ worth of payments — including your mortgage and other debts — in reserve. CNET editors independently choose every product and service we cover.

Below are the benefits of a 15-year mortgage versus a 30-year mortgage and an adjustable rate mortgage. Check back weekly or favourite this page to keep an eye on the ever-changing rates. The table below is updated as of November 12, 2024 and rates are subject to change.

• With a 15-year refinance, this homeowner would pay only $45,500 in interest over their new loan term.
• While we adhere to strict editorial integrity, this post may contain references to products from our partners.
• When you pay down your mortgage faster, you not only save substantially on interest, but build equity at an accelerated rate.
• But as the balance gets smaller, the interest share of the payment declines, and the share going to principal increases.
• One way young homebuyers can break this cycle is by choosing a 15-year mortgage over a 30-year term.
• Due to the shorter repayment term, you pay significantly less interest overall compared to a 30-year loan, potentially saving tens of thousands of dollars over the life of the loan.

What’s the difference between a 15-year fixed mortgage and a 15-year ARM?

15 Year Mortgage Rate is at 6.13%, compared to 6.00% last week and 5.93% last year. These loans meet the guidelines and rules set by the Federal National Mortgage Association (FNMA). You might know it better as Fannie Mae, one of the largest investors of conventional loans. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

In other words, among other things, take into consideration the future of the housing market when choosing the type of mortgage. A 15-year mortgage has a higher opportunity cost, especially when times are very good. For example, if the stock market ends up going up 20% a year for the next three years, you may have preferred to get a 30-year amortizing loan and invest the extra cash flow instead. For example, in 2003, I had a goal of paying off my 30-year fixed mortgage in 10 years. But I ended up refinancing the property after one year to a lower 30-year fixed mortgage. Then I wised up and refinanced the mortgage to an ARM several years later.

When does it make sense to refinance to a 15-year rate?

Due to the inversion, it is actually better value to borrow at longer durations given rates are relatively lower. Hence, all the more reason to lock in a 15-year fixed rate mortgage or 30-year fixed rate mortgage. Ever since I purchased my first property in San Francisco in 2003, I’ve actually preferred adjustable rate mortgages (ARMs). I preferred an ARM over a 30-year fixed mortgage because the interest rate was always lower. But the big benefit of the mortgage fully amortizes across a 15-year duration is that you will likely pay off your mortgage in 15 years, if not sooner. Whereas for folks who take out a 30-year fixed mortgage, there’s a tendency to take the full duration.

If you are not staying in the house, refinancing is not a viable idea. Only if you want to stay in the house for some time then refinance your loan. There are currently no lenders offering these products at current interest rates for 15 year mortgage the moment. If your plan is to absolutely spend the least amount of money overall, a 15-year fixed-rate mortgage is the way to go. But in order to do so, you will have to be willing to make some sacrifices.

The number you come up with, keeping all the pros and cons in mind, will determine if a 15-year mortgage is right for you. If an investor can afford the higher payment, it is in their interest to go with the shorter loan, especially if they are approaching retirement when they will be dependent on a fixed income. “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. Most people, according to Morin, roll these costs into their mortgage as part of a higher rate, rather than paying them outright. The 30-year fixed-rate mortgage is practically an American archetype, the apple pie of financial instruments.

• With interest rates so low, why not lock in a loan for 15 years instead of only five years.
• A 15-year fixed-rate mortgage is a mortgage loan charging an interest rate that remains the same throughout the 15-year term of the loan.
• If you’re nearing retirement age, the decisions on what length of mortgage to get become more specific.
• That said, you may have to opt for a more modest home if you finance with a 15-year loan since your monthly payment will be higher.
• Private mortgage insurance is required for all conventional loans with a down payment of less than 20%.
• With a 15-year fixed-rate mortgage loan, you repay the principal and interest each month through your monthly payment.
• A 15-year fixed-rate mortgage works similarly to other types of mortgages.

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.

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.

Always take advantage of a 15-year mortgage when its rate is lower than a shorter duration ARM. However, nobody knows for sure how their other investments will perform. In a bull market, you want to buy the most home you can afford.

It also requires the discipline to systematically invest the equivalent of those monthly differentials and the time to focus on the investments, which, he adds, most people lack. When mortgage rates are low, a savvy and disciplined investor could opt for the 30-year loan and place the difference between the 15-year and 30-year payments in higher-yielding securities. A shorter-term loan means a higher monthly payment, which makes the 15-year mortgage seem less affordable. But the shorter term makes the loan cheaper on several fronts. In fact, over the full life of a loan, a 30-year mortgage will end up costing more than double the 15-year option. The 15 Year Mortgage Rate is the fixed interest rate that US home-buyers would pay if they were to take out a loan lasting 15 years.

And now, it’s really small, so I plan to pay it off within 12 months. If leverage is so great how come we aren’t all buying stock on margin? I think whatever mortgage term gets you to pay off your loan the fastest is the best one to choose. I consider myself somewhat informed when it comes to investments but I have a hard time with the leverage concept. Even when you’re leveraging your money on real estate your still paying interest. I understand the math on leverage, but not paying interest is still better than paying interest IMO.

That said, 15-year mortgage rates tend to hover around 0.5% – 0.75% lower than their 30-year counterparts. For example, 15-year mortgages have higher monthly payments since you have less time to pay them off. However, if you can’t afford the higher monthly payment of a 15-year mortgage don’t feel alone.

When interest rates drop, astute borrowers will be quick to lock in the lowest fixed rate possible. This way, when market volatility hits and rates rise, the 15-year payment structure protects their minimum monthly payment and offers the most savings long-term. When choosing a term length, think about how much you can afford to pay each month and how quickly you want to pay off your mortgage. If you have a larger monthly budget and want to be able to own your home outright, you might opt for a shorter term. But for many people, keeping their monthly payments as low as possible is the goal, which is why 30-year mortgages are so popular.

Since crossing above the 6.4 percent mark in April this year, 15-year mortgage rates have trended downward. While it remains to be seen whether they’ll continue falling into 2025, the consensus for now is that rates appear to be stable, even with Federal Reserve rate cuts. This table does not include all companies or all available products. After selecting your top options, connect with lenders online or on the phone.

The offer cannot be redeemed for cash or credit and is non-transferable. Pennymac reserves the right to change or cancel the offer at any time, without notice. Buyers will often opt against a 15-year loan because the shorter loan term puts a heavier strain on their budget.