Who Are 15-Year Fixed Mortgage Loans Best For?

People who want to save more in interest by paying off their loan sooner and want an interest rate that never changes over the entire life of the loan are the ones that benefit most from a 15-year mortgage. Read more about other benefits below.

How Do 15-Year Mortgages Work?

Simply put, you’ll pay off your mortgage in 15 years. Because you’ll pay off the loan faster than a 30-year mortgage, you’ll pay less in interest over the life of the loan.Because your interest rate is locked for the life of your loan, your principal and interest payments won’t change over the life of the loan. The amount you pay for your taxes and insurance, though, can go up and down.You may have to pay for mortgage insurance, depending on your down payment amount if you’re buying a home or how much equity you have if you’re refinancing.

What Do You Need To Qualify For A 15-Year Mortgage?

To qualify for a 15-year fixed rate loan, you’ll need:A minimum 3% down payment.A minimum FICO® Score of 620.A debt-to-income ratio (DTI) of no more than 50%. Estimate your DTI by adding your monthly debt payments (such as credit card and car payments) and dividing the total by your monthly income before taxes.Money to cover closing costs, which are about 2 – 6% of the purchase price.

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15-Year Fixed Mortgages

15-Year Fixed Mortgages

Pay off your loan sooner and save significant money in interest.

Who Are 15-Year Fixed Loans Best For?

If you want to save money in interest by paying off your loan sooner, a 15-year fixed loan could be the ideal option for you.

The 15-year fixed is great for people who have a solid financial situation and the means to take on larger payments as a way to save significantly over the life of the loan.

How Do 15-Year Fixed Loans Work?

With a 15-year fixed rate loan, you’ll completely pay off your mortgage in just 15 years.

Because your interest rate is locked, your principal and interest payments won’t change, but your taxes and insurance can fluctuate.

How Do I Qualify For A 15-Year Fixed?

General minimum 3% – 3.5% down payment
Minimum 580 – 620 qualifying FICO^® Score
Debt-to-income ratio (DTI) of no more than 50%
3% – 6% of the purchase price to cover closing costs

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15-Year Fixed Mortgage Rates

Product	Rate	APR
Conforming 15 Year Fixed	6.125%	6.635%
FHA 15 Year Fixed	5.99%	7.008%
VA 15 Year Fixed	6.125%	6.975%

Disclaimers

15-year Fixed-Rate Loan: An interest rate of 6.125% (6.635% APR) is for the cost of 2.00 point(s) ($4,000.00) paid at closing. On a $200,000 mortgage, you would make monthly payments of $1,701.25. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater. Payment assumes a loan-to-value (LTV) of 74.91%.15-year FHA Fixed-Rate Loan: An interest rate of 5.99% (7.008% APR) is for the cost of 2.125 Point(s) ($4,324.38) paid at closing. On a $203,500 mortgage, you would make monthly payments of $1,740.67. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater. Payment assumes a loan-to-value (LTV) of 74.91%.

Payment includes a one-time upfront mortgage insurance premium at 1.75% of the base loan amount and a monthly mortgage insurance premium (MIP) calculated at 0.15% of the base loan amount. For mortgages with a loan-to-value (LTV) ratio of 74.91%, the 0.15% monthly MIP will be paid for the first 11 years of the mortgage term. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments until the end of the loan.15-year Fixed-Rate VA Loan: An interest rate of 6.125% (6.975% APR) is for a cost of 1.875 Point(s) ($3,830.63) paid at closing. On a $204,300 mortgage, you would make monthly payments of $1,737.83. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater. Payment assumes a loan-to-value (LTV) of 76.52%.

VA loans do not require PMI. The VA loan is a benefit of military service and only offered to veterans, surviving spouses and active duty military.

15-Year Fixed Mortgage Benefits

You’ll pay off your mortgage faster than with other loans.
You can pay off your mortgage at any time without prepayment penalties.
You may be able to avoid mortgage insurance with a down payment of 20% or higher.
Your interest rate is fixed for the life of the loan, so you don’t have to worry about rising rates.
You can buy a home with as little as 3% down.
You can refinance your home for up to 97% of its value.

Mortgage Insurance Requirements

You’ll have to pay primary mortgage insurance (PMI) with your 15-year fixed-rate loan if your down payment is less than 20%.

This typically costs 5% – 1% of your loan amount per year, spread over 12 payments.
Once you reach 20% equity in your home, you may be able to request to cancel PMI.
PMI is often canceled automatically once you reach 22% equity.

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15-Year Fixed Mortgages