Best 15-Year Mortgage Rates Today

A 15-year mortgage is a loan used to finance a home with a fixed rate of interest and a term of 15 years. Your interest rate is locked in and will never change. This is different than a 15-year adjustable rate mortgage where your rate can change. Since your interest rate won’t change, you’ll pay the same amount of principal and interest (P&I) each month for the entire 15-year repayment term. Although the mortgage portion of your total monthly costs as a homeowner won’t change, your monthly cost will increase or decrease when the other items you must pay to own a home change, such as homeowners insurance, real estate taxes, possible homeowners association fees, and possible private mortgage insurance (PMI).

You can expect your property taxes, insurance, and HOA fees (if applicable) to increase over time. If you’re required to pay PMI because you had a down payment of less than 20%, this cost will eventually go away (once your balance is at 78% of your home's original value). Your monthly payment will decrease when this happens.   

People who want to pay off their mortgage in half the time of a 30-year mortgage and can afford a larger payment should consider a 15-year mortgage. A 15-year mortgage has lower interest costs than a 30-year mortgage, not only because the term is half as long but also because the interest rate is usually lower. 

To put the payment difference in perspective, let’s assume a $350,000 mortgage carries a rate of 2.210% with a 15-year term versus a rate of 2.847% with a 30-year term.

Your monthly payment for principal and interest (P&I) would be about 58% greater ($839) with the 15-year term ($2,286) than with a 30-year term ($1,447). However, you’ll save more than $100,000 in interest if you keep the 15-year mortgage for the entire term, and you’ll pay your loan off 15 years sooner.

Research from the National Association of Realtors suggests that the median homeownership duration in the U.S. was 13 years in 2018, but ranged from six to 18 years in the country’s 100 largest metropolitan areas. If you plan to stay in your home on the average to the longer end of this range, your home will be nearly paid off or paid off in full by the time you’re ready to purchase your next home. 

This means you’ll have built up more equity in your home with a 15-year mortgage and with greater equity, you’ll have greater buying power. You might be able to buy your next home with cash or put down a bigger earnest money deposit. Both of these things can make purchase offers more attractive to sellers, giving you a potential advantage over other buyers. Plus, if you’re able to put down a larger mortgage down payment, lenders might be willing to give you better terms.

It’s harder to qualify for a 15-year mortgage than a mortgage with a longer repayment term because it has a higher monthly payment. This means you need to have more income to qualify for a 15-year mortgage than a mortgage with a longer-term. You can expect to need a total debt-to-income (DTI) ratio of 36% to 43% (50% for some loans) and a front-end DTI ratio (which includes housing costs only) of 28% to 31% to qualify for a mortgage from most lenders. If you have plenty of extra income, then qualifying for a 15-year mortgage shouldn’t be a problem. 

If qualifying for a 15-year mortgage is important to you and you don’t have a significant cushion in your budget, you can always consider purchasing a less expensive home. Once you’ve owned the home for a few years, then you could sell it and use the equity you’ve built to put toward a larger down payment on a more expensive home. For example, if you planned on getting a $350,000 mortgage, perhaps you could opt for a $250,000 mortgage instead. 

As shown in the example below, the monthly principal, interest, taxes, and insurance (PITI) payments are about the same between a $350,000 30-year fixed-rate mortgage and a $250,000 15-year fixed-rate mortgage. However, you would have repaid $74,320.87 in principal on the 15-year mortgage at the end of five years versus only $39,702.76 in principal on the 30-year mortgage. This can be an easy way to build equity for your next home purchase.

An example of the difference between what you might pay for a 30-year fixed-rate mortgage versus two 15-year fixed-rate mortgage options is shown below:

The primary difference between a 15-year and a 30-year mortgage is the repayment term. Both types of mortgages have a fixed interest rate. However, you’ll pay off a 15-year mortgage in 15 years and a 30-year mortgage in 30 years. Since the repayment term is shorter with a 15-year mortgage, your payment will be higher than with a 30-year mortgage. Even so, you’ll usually get a lower interest rate with a 15-year mortgage, and you’ll pay less interest in total.

Using these rates in our example, your monthly payment would be $839 higher (about 58%) for the 15-year mortgage. This can make qualifying for the mortgage more difficult.

Yet another difference between a 15-year and 30-year mortgage is how quickly the principal is repaid. As shown in our example, you would have reduced your principal balance by less than $40,000 with a 30-year mortgage at the end of five years. In contrast, you would have paid back over $104,000 in principal with a 15-year mortgage.

Since the principal is paid back so much quicker, even if the interest rates were the same, you would pay less interest on the 15-year mortgage than on the 30-year mortgage. This is because the interest calculation is based on the principal balance. So, the smaller the principal balance, the less interest you have to pay. In our example, you would pay $61,531.10 in interest over the entire term of the 15-year mortgage versus $170,880.64 in interest over the entire term of the 30-year mortgage.

Rates are lower for 15-year mortgages than with longer fixed-rate mortgages because shorter-term mortgages are less risky to lenders. Since there is less risk associated with short-term loans, lenders are willing and able to offer lower rates. 

A 15-year mortgage can be a good idea for refinancing, particularly if you’ve been in your home for several years and want a lower interest rate. If you’ve been in your home for several years, it might be easier to qualify, as your income might have increased or you may have equity built up in your home. However, if you want to refinance to lower your payment, a 15-year mortgage isn’t a good idea. 

This is because the monthly payment on a 15-year mortgage is greater than what you would pay for a 30-year mortgage of the same amount. Unless you’ve had your home for many years and have significantly reduced your principal balance, even if you’re able to get a lower interest rate, your monthly payment will most likely increase with a 15-year mortgage over a standard 30-year mortgage.