The 15-year fixed rate mortgage, explained.
A 15 year fixed rate mortgage is a traditional mortgage loan allowing you to pay for your home over a 15-year period. Fixed rate means the interest rate you pay on the loan is set at the time of the loan and does not change over the life the loan. Because the interest rate stays the same, you enjoy a fixed mortgage payment as well, meaning that your monthly mortgage payment stays the same over the life of the loan as well.
Characteristics of the 15-year fixed rate mortgage.
- Interest rates are typically lower than a 30-year fixed
- A fixed-rate loan, spreading the cost of your home over 15 years
- Allows you to pay down the principal balance faster than a 30-year fixed
- Pay less in interest over the life of the loan in exchange for higher monthly payments
Is a 15-year fixed rate mortgage the right loan option for you?
The 15-year mortgage option is popular for people who want to pay off their homes before retirement, as well as with dual-income families who want to pay off their home loans quickly. A 15-year fixed rate mortgage may be right if you:
- Have the income to support a higher monthly mortgage payment; if you’re not sure, check out our mortgage calculator, or consider another loan option, such as the 30-year fixed rate mortgage
- Plan to stay in the home for a short time and want to take advantage of the lower interest rate
- Prefer a higher monthly payment for the benefit of paying off your mortgage faster and paying less interest
- Want the security of knowing what your mortgage payment will be for the life of the loan