What is a 15-year fixed rate mortgage?
A conventional 15-year fixed rate mortgage is similar to a 30 year-fixed rate mortgage in many respects. A conforming 15-year fixed rate loan features a limit of $424,100 ($636,150 in high-cost areas) and a consistent rate throughout its lifetime, giving you secure and predictable monthly mortgage payments. So what does this loan offer that a 30-year fixed rate loan doesn’t?
The main difference is the length. With a 15-year fixed rate loan, you’ll pay off your mortgage in half the time, putting you on the fast track to full amortization. A 15-year fixed rate mortgage also features lower rates than its 30-year counterpart. A shorter loan term plus lower mortgage rates means less interest on your loan and more money in your bank account! Conventional 15-year fixed rate mortgage features include:
- 3-5% minimum down payment options for qualified homebuyers.
- Regular, qualified income required.
- No private mortgage insurance (PMI) with 20% or more down.
- Seller assistance with up to 3% of closing costs.
- Loans up to $5 million for non-conforming mortgages.
- HomeStyle renovation loans with as little as 5% down.
- 203k renovation loans with a minimum 620 FICO score.
Is a 15-year fixed rate mortgage right for you?
A 15-year fixed rate mortgage is popular with two different demographics. Younger homebuyers with sufficient income often use it to pay off their home before their children start college, while older homebuyers with established careers and higher income use it to pay off their mortgages before retiring. A word to the wise: 15-year fixed rate mortgages feature higher monthly payments than a 30-year loan. You’ll need to factor that into your budget when deciding whether this loan fits your needs.
Why trust Guaranteed Rate with your 15-year fixed rate mortgage?
Low, low rates, top-notch service and a streamlined mortgage process. We put our customers first and close 15-year fixed rate loans with blazing speed. Apply now—we’d love to help you find a terrific loan for your dream home.