The 15 year fixed mortgage is set up so that you pay off your home in 15 years, and the fixed interest rate means you never have to worry about the rate changing during that time. Trying to decide if this type of mortgage is right for you? Here’s what you need to know.
Benefits of the 15 year mortgage
Generally, these mortgages have even lower interest rates than their 30 year counterparts. For instance, at the time of writing, if you have a 760 credit score and you borrow $417,000 you’re likely to qualify for an annual percentage rate of 4.439% on a 30 year mortgage, but on a 15 year fixed rate mortgage, that rate drops to 3.904%.
However, even if a 15 and a 30 year mortgage have the exact same interest rate, you end up paying less interest on the 15 year mortgage because you pay it off sooner. That saves you a lot of money over the lifetime of the loan.
Advantages of a 15 year fixed mortgage
When you take out a 15 year fixed mortgage, you get to enjoy the exact same interest rate for the lifetime of the loan. That means if the rate is 4% when you take out the loan, it stays at 4% for the next 15 years. That gives you predictability and peace of mind.
In contrast, when a mortgage has an adjustable rate, the rate changes periodically. Depending on how the loan is set up, the rate may adjust once every five years, annually, or even monthly. If your loan has a big rate increase, that can make your payments unmanageable.
Who should get a 15 year fixed mortgage?
Although this mortgage isn’t right for everyone, it is ideal for many people. Here are just a few signs that you should consider this type of mortgage:
- You plan to live in your home for at least a couple years
- You want to pay off your home in 15 years or less
- You can afford slightly larger payments — to pay off the loan in 15 years, you end up making larger payments than you do on a 30 year mortgage
- You have equity in your home and want to refinance to a shorter term
- You want the stability of a fixed interest rate
Working with Capital Mortgage Advisors
When you decide to work with Capital Mortgage Advisors, you get to enjoy a lot of advantages. You can get a free online quote easily, or if you prefer, you can contact us and work directly with one of our customer service agents to get a loan.
If you decide that the 15 year fixed mortgage isn’t right for you, that’s okay. We have tons of options and can help you figure out the best approach for your needs. In particular, we have VA home loans, FHA loans, 30 year fixed rate mortgages, USDA loans, first time home buyer programs, and multiple other types of loans. To learn more, give us a call, fill out the online contact form, or start an application now. We want to help you get the right mortgage for your needs.