What is a 15-year fixed-rate mortgage, and how does it stack up against the popular 30-year fixed-rate mortgage?
If you take out a 15-year fixed-rate mortgage, you’ll repay the loan in 15 years and have the same interest rate during that entire period. This means the principal and interest portions of your monthly payment won’t change, which lets you budget more accurately for the future.
Compared to a mortgage with a longer loan term, you’ll end up saving money on interest. But your monthly housing costs are also higher with a 15-year mortgage, meaning it might not be an affordable option for everyone.
So, is a 15-year mortgage worth it? The answer depends on your personal situation. Let’s quickly walk through the advantages and disadvantages of a 15-year mortgage:
Pros and Cons of a 15-Year Mortgage
|Benefits of a 15-Year Mortgage||Drawbacks of a 15-Year Mortgage|
|Build equity faster and achieve full ownership of your home sooner||Higher monthly payment|
|Lower interest rates||Less flexibility in your budget for other expenses|
|Less total interest paid||Can’t borrow as much compared to a 30-year mortgage|
15-Year Mortgage FAQ
Get the answers to some frequently asked questions about 15-year mortgages.