Current 15-year mortgage rates

A 15-year mortgage has the potential to save you significant sums of interest, but you'll be beholden to higher monthly payments.

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By Lauren Ward

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Lauren Ward

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Lauren Ward is a Credible authority on mortgages and personal finance. Her work has been featured by Time, This Old House, Money Under 30, The Balance, and more.

Edited by Reina Marszalek

Written by

Reina Marszalek

Senior editor

Reina is a senior mortgage editor at Credible and Fox Money.

Updated April 18, 2024, 12:11 PM EDT

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A home is a major financial purchase, so it makes sense to explore all the ways to cut down on costs. If you want to save money over the long term, consider a shorter mortgage compared to the standard 30-year home loan.

Fifteen-year mortgage rates are usually much lower, saving you money over time. But since you're repaying the mortgage in half the time as usual, monthly payments can be higher.

Compare current 15-year mortgage rates

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For example

A 30-year $500,000 mortgage with a 6% interest rate would have a monthly payment would be $2,998 while a 15-year mortgage with the same loan amount and interest rate would be $4,219, nearly 34% higher.

The higher monthly payments could be one reason why homebuyers are an option for other term lengths. According to the Federal Reserve Bank of St. Louis, just 10% of new mortgages issued are for 15-year terms. Consider both the pros and cons of these shorter-term mortgages to find out if it's a good fit for you.

Pros and cons of a 15-year mortgage

Completely paying off your mortgage in just 15 years can be particularly attractive to homebuyers who have the funds to cover both the sizable monthly payments and their other expenses.

Pros

  • Lower interest rate: A lower interest rate over a shorter period of time means you'll spend a lot less on your home. "With interest rates being higher than what we are accustomed to over the last several years, a 15-year mortgage can be lucrative," said Caroline Tanis, CDFA, financial adviser at Tanis Financial Group.
  • Shorter mortgage pay-off: If you dream of living a debt-free life, a 15-year mortgage helps you own your home in full much faster. However, Tanis noted that you can also achieve this with a 30-year mortgage that doesn't have an early payment penalty. "When you are able to, make additional or higher-than-the-minimum payment which will shorten the length of the mortgage and reduce the overall amount you pay in interest costs."
  • Quicker equity growth: Gain equity in your home faster with a shorter term loan. This helps you qualify for low-cost home financing options in the future.

Cons

  • Higher monthly payment: Expect a much higher monthly payment when you choose a 15-year home loan. "It can be exciting to pay a mortgage off quickly and build equity in a home, but you need to make sure you will be able to balance a higher mortgage payment with all of the other expenses in life," Tanis said.
  • Less cash to invest: Interest rates are still considered quite low compared to other periods of history. The loss of gains in investments or savings accounts could potentially outweigh the savings of a low-interest mortgage.
  • Harder to qualify: You may need a higher credit score to be approved for a 15-year mortgage. Your income and other debts — known as your debt-to-income ratio (DTI) — also need to support a higher payment.

How to get a mortgage

  1. Check your credit score: The approval and cost of your mortgage largely depend on your credit score. Get a free copy of your credit report to check for accuracy. Then find your numerical credit score through your bank, credit card issuer, or online service so you know your credit rating range and the type of interest rate to expect.
  2. Set a budget: Once you have an idea of your interest rate, use a mortgage calculator to estimate monthly payments of homes at different price points (with your down payment subtracted). Remember to include estimates for homeowners insurance and property taxes as well.
  3. Compare lenders: Mortgage offers can vary depending on the lender. Shop around to compare available home loan programs, time close, level of communication, and more. Narrow your list down to a few different options.
  4. Get pre-approved: With a few lenders in hand, it's time to get pre-approved. Get an estimate of loan offers to compare total costs.
  5. Submit a mortgage application: Pre-approval is an informal step; next it's time to apply in full once you have an accepted offer on a home. This involves submitting personal details and supporting financial documentation.
  6. Go through underwriting: The lender now sends your application to an underwriter. It's their job to confirm all your information to make sure you qualify for the loan and that the home meets approval requirements (such as appraising for the sale price). You may be asked to submit additional documents to verify your information.
  7. Close on your new home: If you're approved, you'll be ready to close. This involves signing paperwork (including the loan agreement) and paying your down payment and closing costs. Afterwards, you get the keys to your home.

How to get a low mortgage rate

There are several factors that impact your mortgage rate, no matter how long the term lasts. Here are the most important things a lender looks at and how you can improve them.

  • Credit score: It's hard to quickly improve your credit score unless you have a major mistake listed on your report. But it's still good practice to pay all of your monthly bills on time and pay down revolving debt. You should start seeing incremental changes each month.
  • Down payment: A larger down payment helps lower your interest rate because you're more financially vested in your new home. Ask your lender for rate quotes based on different down payment options you're considering.
  • Debt-to-income ratio: Income alone isn't enough to qualify for a low rate. You also need an appropriate level of debt. This includes things like credit card balances, car loans, student loans, and your expected mortgage payment. Pay down high-interest balances to lower your monthly debt before you apply for a home loan.

15-year mortgage FAQ

What credit score do you need to get a good 15-year mortgage rate?

There is no minimum credit score required specifically for a 15-year mortgage, but you'll need to meet the credit requirements of the type of loan you choose. Conventional, FHA, and VA loans offer 15-year terms. Your credit score does impact your rate, so a higher score will help lower your monthly payments.

What is a mortgage rate lock?

Once you receive a loan offer, most lenders lock in the quoted rate for a period of time until closing. This could be 30 to 60 days (or even longer depending on the lender). Even if rates climb, you'll get the original rate if you close within the rate lock period. The downside is that if rates go down, you may be stuck with the higher rate. You could negotiate a free "float down" that lets you change your rate if they drop before you close.

Should you get a fixed-rate mortgage or a variable-rate mortgage?

There are a lot of factors to consider when choosing between a fixed rate and variable rate mortgage. A fixed rate gives you the peace of mind that your principal and interest payment will not change over time. A variable rate mortgage is typically lower to begin with, but resets after an initial fixed period. This means your mortgage payments could steadily increase in the future.

Meet the contributor:
Lauren Ward
Lauren Ward

Lauren Ward is a Credible authority on mortgages and personal finance. Her work has been featured by Time, This Old House, Money Under 30, The Balance, and more.

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Fox Money is a property of Credible Operations, Inc., which is majority-owned indirectly by Fox Corporation. This material may not be published, broadcast, rewritten, or redistributed. All rights reserved. Use of this website (including any and all parts and components) constitutes your acceptance of Fox's Terms of Use and Updated Privacy Policy | Your Privacy Choices.

*Credible Operations, Inc. We arrange but do not make loans. All loans are subject to underwriting and approval. Registered Mortgage Broker - NYS Department of Financial Services. Advertised rates are subject to change and may not be available at closing, unless locked with a lender