15 Year Mortgage
With a 15-year fixed-rate mortgage you will pay off the loan in one third of the time it would take to pay off the traditional 30-year fixed-rate mortgage. This shorter term makes it possible 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 can shorten your loan term plus enjoy a lower interest rate. 10 year mortgages are usually offered at interest rates lower than those available for 30-year mortgages. However, higher monthly payments may make it more difficult to qualify for the 15 year fixed-rate mortgage compared to the 30 year fixed-rate mortgage.
15 Year Mortgage Features
- A 15-year mortgage offers a lower interest rate than a 30 or 20 year mortgage. This will save you a significant amount of interest over the life of the loan. For example, with a $100,000 loan at 6.00 percent interest, the 15-year mortgage will save you $63,900 in interest payments over the life of your loan when compared to the same mortgage amount for a 30 year term. However, your monthly mortgage payments will be higher.
- The shorter-term allows you to own your home free and clear sooner.