Average rates on a 15-year fixed mortgage fell to another new record low this week of 2.39 percent in Bankrate’s weekly survey. It’s the first time 15-year rates have dipped below 2.4 percent in our metrics.
The ongoing trend of low interest rates have made 15-year mortgages accessible to more borrowers than ever. These shorter loans cost less over their lifetime than the benchmark 30-year mortgage, but their tighter repayment period means higher monthly charges, which can strain household budgets.
At today’s interest rates, borrowers with a $300,000 mortgage would save around $100,000 in interest overall by taking out a 15-year loan instead of a 30-year one. So, if you can afford the higher monthly costs, you stand to benefit in the long run, and it’s worth giving a shorter mortgage term serious consideration.
Interest rates are expected to start rising again soon, but most experts predict they’ll stay low for a while compared to historical trends, even once they start ticking higher.
“We’re going to start off 2021 with a continuation of an extremely low-rate environment,” said Frank Nothaft, executive and chief economist at CoreLogic.He expects average interest rates in 2021 to be lower overall than the 2020 average.