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.

15-Year Fixed-Rate Mortgage

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

15-Year Fixed Mortgage Rates

Last updated:

What To Know About 15-Year Fixed-Rate Mortgages

Who Are 15-Year Fixed-Rate Loans Best For?

A 15-year fixed-rate mortgage might be the right option for you if:

You want to save money by paying off your loan sooner.
You can afford a higher monthly payment.
You want a predictable monthly payment.

How Do 15-Year Fixed-Rate Loans Work?

You pay off your loan over 15 years.
Your interest rate and monthly payment remain the same.
Your monthly payment will be higher and your interest rate may be lower than with a 30-year fixed-rate mortgage.
You’ll pay less overall interest for your loan.

How Do I Qualify For A 15-Year Fixed-Rate Loan?

Minimum 3% down payment
Minimum credit score of 580 to 620, depending on loan type
Debt-to-income ratio no higher than 50%
Must pay closing costs, usually 2% to 5% of the purchase price

15-Year Fixed-Rate Loan Benefits

Pay off your mortgage faster.
Pay less interest on your loan and save money.
Your interest rate and monthly payment don’t change.
You can buy a home with a conventional loan for as little as 3% down.
You don’t have to pay for PMI if your down payment is at least 20%.

FHA Property Requirements

Mortgage insurance protects the lender if you can’t repay your loan. You’ll need to purchase mortgage insurance for the following loan types:

Conventional loan with a down payment of less than 20%
FHA loan
USDA loan

Frequently Asked Questions

Still have questions about 15-year fixed-rate mortgages? We’ve got answers.

Is a 15-year loan term better than a 30-year term?

A 15-year fixed-rate mortgage typically comes with a lower interest rate, so your loan will cost less overall. You’ll also pay off your home loan in half the time. However, be sure you can afford a higher monthly payment.

Can your monthly payment still change?

With a fixed-rate mortgage, your payment for principal and interest will not change. However, changes to the amount you pay for homeowners insurance and property taxes can affect your monthly payment.

How can a 15-year fixed-rate loan help me save money?

Even though you’ll have a higher monthly payment, your interest rate may be lower by as much as a full percentage point. Plus, you’ll be borrowing money for fewer years, so there’s less time for interest to grow.