15 Year Fixed Rate Mortgage

You pay off a 15-year fixed-rate mortgage in half the time you pay off the traditional 30-year fixed-rate mortgage. This shorter term makes it possible for you to build up equity in your home faster, which can let you move up more quickly to a more expensive home or save more in preparation for retirement or a child’s education. This loan is particularly attractive if you’re refinancing your mortgage because you shorten your loan term plus enjoy a lower interest rate – 15-year mortgages are usually offered at interest rates lower than those available with 30-year mortgages. However, higher monthly payments may make it more difficult to qualify for compared to the 30-year fixed-rate mortgage.

Advantages

• Offers a lower interest rate than a 30-year or 20-year mortgage.
• Saves you a significant amount of interest over the life of the loan. For example, with a $100,000 loan at 8.25 percent interest, the 15-year mortgage will save you $95,000 in interest payments over the life of your loan, compared to the same mortgage amount for a 30-year term. However, your monthly mortgage payments will be higher.
• This shorter-term mortgage allows you to own your home outright sooner.

Details

Eligible properties include one- to four-family, owner-occupied principal residences; second homes and investment properties; and condos, co-ops, and planned unit developments. Manufactured homes are also eligible. (Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation.)