Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.
The 15-year mortgage, though not as popular as the ubiquitous 30-year mortgage, is a solid money-saving option for borrowers who can afford a larger monthly payment.
Because the terms are shorter and 15-year mortgage rates are lower than 30-year rates, you could potentially save hundreds of thousands of dollars over the life of the loan by opting for a 15-year fixed-rate mortgage.
15-year mortgage rates today
Check out the latest rates to see how today's 15-year mortgage rates and 15-year refinance rates compare.
| Mortgage term | Average mortgage interest rate | Average refinance interest rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
How 15-year mortgages differ from 30-year mortgages
30-year and 15-year mortgage rate trends
Here's how 30-year and 15-year mortgage rates have trended over the last five years, according to Freddie Mac data:
During the pandemic, mortgage rates hit historic lows, and 15-year mortgage rates neared 2%. But they've increased quite a bit since then, and trended up throughout most of 2023. In October, average 15-year mortgage rates surpassed 7% for the first time in nearly 23 years, according to Freddie Mac.
Rates are no longer near 7%, but they have been relatively high so far this year. In April, average 15-year fixed mortgage rates were around 6.18%, which is up 30 basis points from the previous month's average, according to Zillow data. They've been a little lower so far in May.
Will mortgage rates go down? 5 reasons you shouldn't wait for rates to drop>>
Lower interest rates
Average 15-year rates are lower than 30-year mortgage rates because you're signing up for a shorter term, which is less risky for the lender. That's the general rule: The shorter your fixed-rate term, the lower the rate. You'll also pay less in interest over the years with a shorter term, because you'll repay the mortgage sooner.
Build equity faster
Because you're paying off a 15-year mortgage faster, you'll also gain equity in the home sooner than you would with a 30-year loan. This can be beneficial if you end up needing to take cash out of the home at some point to fund a home improvement project, or if you want to sell and use your equity as a down payment for your next home.
Higher monthly payments
A 15-year fixed mortgage helps you save money on interest over the long term, which means it's a good deal if you're looking to keep your overall costs down. But these mortgages aren't for everyone, especially if you're looking to keep your monthly payment as low as possible.
Your monthly payments will be higher with a 15-year mortgage than with a 30-year mortgage or 30-year mortgage refinance. You're paying off the same amount in half the time, so you'll pay more each month.
Benefits of a 15-year mortgage
Total interest savings
The shorter your term, the less you'll pay in interest both in the short and long term.
To see how much you could save overall with a 15-year fixed-rate mortgage, take a look at this example for a $250,000 loan, using average interest rates for the first week of May 2024, according to Freddie Mac data:
| Type of mortgage | 15-year fixed-rate | 30-year fixed-rate |
| Interest rate | 6.38% | 7.09% |
| Monthly payment | $2,161 | $1,678 |
| Total interest paid | $139,036 | $354,222 |
By the end of your term with the 30-year loan, you'll have paid back more than double what you initially borrowed when you add interest to your original loan amount. Meanwhile, the 15-year loan has you spending $215,000 less on interest overall.
Pay off your mortgage sooner
If you plan to stay in your home for a long time, you might prefer a 15-year mortgage since you'll pay off your mortgage sooner and benefit from owning your home free and clear. You'll also build equity more quickly, which you can then access using a home equity loan, HELOC, or cash-out refinance.
How to get a good 15-year fixed mortgage rate
Lenders take your finances into consideration when determining an interest rate. The better your financial situation is, the lower your rate will be.
Lenders look at three main factors: down payment, credit score, and debt-to-income ratio.
- Down payment: Depending on which type of mortgage you take out, a lender might require anywhere from 0% to 20% for a down payment. But the more you have for a down payment, the lower your rate will likely be.
- Credit score: Many mortgages require at least a 620 credit score, and an FHA loan lets you get a mortgage with a 580 score. But if you can get your score above the minimum requirement, you'll probably land a better interest rate. To improve your score, try making payments on time, paying down debts, and letting your credit age.
- Debt-to-income ratio: Your DTI ratio is the amount you pay toward debts each month in relation to your monthly income. You generally can't get a mortgage with a DTI above 50%, and you can get a lower mortgage rate with a lower ratio. To decrease your DTI ratio, you either need to pay down debts or consider ways to increase your income.
You should be able to get a low 15-year fixed rate with a sizeable down payment, excellent credit score, and low DTI ratio.
Use our free mortgage calculator to see how today's rates will affect your monthly payments and long-term finances.
Mortgage Calculator
- Paying a 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $51,562.03
- Paying an additional $500 each month would reduce the loan length by 146 months
You can apply for preapproval with a lender to get an idea of the rate you'll pay. Just be sure to pay attention to both the rate and the mortgage APR. The APR shows you the full cost of borrowing, not just the interest rate. A mortgage's APR takes into account things like points and fees paid to the lender in addition to your interest rate.
Is a 15-year mortgage right for you?
Consider your income
Can you afford a larger monthly mortgage payment? Most borrowers opt for a 30-year term since it gives them a long time to pay back the loan, lowering their monthly payments. A longer term also enables you to borrow more money. If your budget is tight, you might have to lower your price range to find a home you can afford with a 15-year loan.
Long-term plans
You might like a 15-year fixed mortgage if you plan to stay in your home for a long time and want to be aggressive about paying off your mortgage.
If you want to move in the next few years, you might prefer a different term. A 30-year fixed rate will come with lower monthly payments. An adjustable-rate mortgage could also be good. With an ARM, you might be able to lock in a lower rate during the intro rate period, then sell or refinance before your rate changes.
Financial goals
The extra money you'll spend every month on a 15-year mortgage is money that can't be spent elsewhere. Getting a 30-year mortgage with a lower monthly payment could enable you to up your retirement savings or put away cash for a new car or a vacation. Be sure to consider the full financial picture before committing to a shorter term loan.
15-year mortgage rates FAQs
Average 15-year mortgage rates have generally been hovering in the 6% range in recent weeks.
The main benefits of getting a 15-year mortgage are a lower interest rate, less interest paid overall, and building equity faster. But the trade-off is that you'll have a larger monthly payment due to the shorter term.
Recently, 30-year mortgage rates have been closer to 7%, which is higher than typical 15-year rates, which have been around 6%.
Average mortgage rates are lower on 15-year mortgages compared to loans with longer terms. You'll also pay less interest because the term is shorter, so you'll spend less time accruing interest.
Yes, it's not uncommon for borrowers to refinance into a shorter term like a 15-year mortgage to lower their interest costs.
Yes, 15-year mortgages come with larger monthly payments, which can potentially put a strain on borrowers' budgets and limit how much they can afford to borrow.
You should get rate quotes from multiple mortgage lenders to be sure you're getting the best rate. Improving your credit score and having a larger down payment will also help.
Yes, there are many low down payment mortgages that include 15-year term options. You could put as little as 3% down with a conventional loan.
What's a Zestimate?
