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Current 15-year mortgage and refinance rates
Today's 15-year mortgage rates
On Thursday, January 28, 2021, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the benchmark 15-year fixed mortgage rate is 2.360% with an APR of 2.690%. The average 15-year jumbo mortgage rate is 2.380% with an APR of 2.450%. If you're looking to refinance, the average 15-year refinance rate is 2.410% with an APR of 2.640%. View the table below for rates and APRs for a variety of loan types.
|30-Year Fixed Rate||2.870%||3.170%|
|20-Year Fixed Rate||2.700%||3.030%|
|15-Year Fixed Rate||2.360%||2.690%|
|10/1 ARM Rate||2.980%||3.900%|
|7/1 ARM Rate||2.880%||3.870%|
|5/1 ARM Rate||2.980%||4.000%|
|30-Year VA Rate||3.100%||3.390%|
|30-Year FHA Rate||2.640%||3.510%|
|30-Year Fixed Jumbo Rate||2.900%||3.010%|
|15-Year Fixed Jumbo Rate||2.380%||2.450%|
|7/1 ARM Jumbo Rate||2.970%||3.830%|
|5/1 ARM Jumbo Rate||2.950%||3.910%|
Rates as of January 28th, 2021 at 6:30 AM
The table above brings together a comprehensive national survey of mortgage lenders to help you know what the most competitive 15-year mortgage interest rates are. This interest rate table is updated daily to give you the most current rates when choosing a 15-year mortgage home loan.
Fall 2020 has seen multiple new record low rates for the 15-year mortgage, enticing more homeowners to take advantage of the substantial interest savings associated with these shorter-term loans.
What is a 15-year fixed mortgage?
A 15-year fixed-rate mortgage is a home loan with a repayment term of 15 years. It offers borrowers the same (fixed) interest rate and monthly payments throughout the life of the loan.
The long-term advantage of a 15-year fixed-rate mortgage is that it’s cheaper than other mortgage options; however, monthly payments are higher than loans with a longer repayment term, like a traditional 30-year mortgage.
The 15-year mortgage has been popular with homeowners lately.
Data from the Mortgage Bankers Association show that there were 38.4 percent more 15-year mortgage applications (both for refinances and new purchases) in the week that ended Oct. 2 compared with the same week in 2019.
- Interest rates are generally lower on 15-year mortgages compared with 30-year loans.
- Borrowers pay off the loan faster, so less interest overall is paid.
"Borrowers will generally secure a lower interest rate on a 15-year mortgage than a 30-year mortgage. Because they are paying down the loan more quickly and have a lower rate, these borrowers will pay significantly less interest over the life of the loan," says Rick Bechtel, executive vice president of U.S. residential lending for TD Bank. "This long-term savings makes a 15-year loan an attractive option for borrowers who can manage a higher monthly payment."
Pros and cons of a 15-year mortgage
Here we’ll look at both the positive and negative aspects of a 15-year mortgage, so you can see how it fits into your financial goals.
- The interest rates are usually lower.
Historically, interest rates on 15-year mortgages fall below other mortgage options, making it a nice boost to your bottom line. A quick check of the current mortgage rate table will show you how much you can save by getting a 15-year home loan versus other loan types.
- You’ll make fewer payments (180) than you would with a conventional 30-year mortgage (360).
Fewer payments mean less overall interest. Even if you got the same rate on a 15-year fixed-rate mortgage as you did on the 30-year fixed-rate mortgage, you would still pay less in interest because your payments would end 15 years sooner.
- You’ll pay off your mortgage faster.
Paying off a mortgage is often a cause for celebration. It’s one less bill to worry about, and now you own your house free and clear, which can be a mental relief as much as a financial one.
- You can build equity more quickly.
Because you’re paying down your principal in half the time you would for a 30-year mortgage, you speed up the equity-building process. Equity is basically how much of the home you own. For example, if you owe $150,000 on a home that cost you $300,000 and today that home is worth $360,000, you have $210,000 of equity in that house — the bank has the rest.
- You'll pay more each month.
For many people, the larger monthly payment is the main impediment of 15-year mortgages. You repay a larger portion of the principal each month than with a 30-year loan. That ultimately means you’ll have less money available in your budget each month for other expenses and investments, which can make for a tight financial situation for some people.
- You’ll qualify for a lower mortgage amount.
Lenders want to make sure you can comfortably afford to pay them back, so if you max out your budget with the monthly payments on a 15-year mortgage, they probably won’t be willing to lend you as much money as they would with a longer-term loan.
- You might sacrifice saving for retirement.
Don’t be so eager to pay down your mortgage that you neglect retirement savings. Over time, the stock market has grown faster than home values, so it can make sense to use the extra cash freed up with the smaller payment of a 30-year loan and invest the difference in your retirement account.
Comparing 15-year fixed and 30-year fixed mortgages
The key differences between the 15-year and 30-year fixed mortgages are:
- Length of mortgage
- Interest rate
- Total amount of interest paid
The interest rate and total amount of interest paid on 15-year fixed-rate mortgages is less, but the monthly payments are more.
Depending on your financial situation, it’s easier to qualify for a bigger loan with a 30-year mortgage because the monthly payments are more affordable. A lender won’t back a loan that you can’t afford, so even if the total amount is the same, the difference in monthly payments can change what’s financially feasible for some borrowers.
"If there are concerns about a borrower's future ability to repay their mortgage, the borrower may be better off taking a 30-year mortgage now and making additional payments along the way to pay it off early," Bechtel says. "Borrowers should discuss their options with their loan officer."
Tax deductions and 15-year fixed mortgage rates
A 15-year mortgage means you pay less interest -- and you also have less opportunity to take advantage of the mortgage interest deduction.
There’s a caveat: The mortgage interest deduction no longer is of much use to most homeowners, no matter the length of the loan. That’s because the standard deduction has soared under the Tax Cuts and Jobs Act of late 2017, while mortgage rates have plunged. For 2020, a married couple filing jointly gets a standard deduction of $24,800. If you had taken a 30-year mortgage for $600,000 at 3.5 percent at the end of 2019, you’d pay about $20,800 in interest in 2019. In other words, even a large mortgage with a long term and a rate above today’s record lows wouldn’t generate enough interest to take the tax break.
The Tax Cuts and Jobs Act, which is in effect from 2018 to 2025, allows most homeowners to deduct all of their mortgage interest payments for the year on home loans up to $750,000. But that deduction won’t do much for you unless you have other deductions to push you above the standard deduction.
Differences between a fixed-rate and adjustable-rate mortgage
Fixed-rate mortgages are a little more straightforward than their adjustable-rate counterparts, because a fixed-rate loan keeps the same interest rate throughout its term. That means over the course of a fixed-rate mortgage, whether it’s 15 or 30 years, your payment will be the same every month, and the interest will accrue predictably over the life of the loan.
An adjustable-rate mortgage, or ARM, on the other hand, can periodically see changes in its interest rate. That means your monthly payment can change, and the total cost of the loan will go up or down along with it. Usually, an adjustable-rate mortgage starts at a lower interest rate, and then gets more expensive as the loan matures. The most common kind of adjustable-rate mortgage is a 5/1. Those loans keep the same, initial interest rate for the first five years, and then readjust annually after that.
Fixed-rate mortgages are generally best for people who plan to stay in their house for a long time, whereas adjustable-rate mortgages can allow someone to live somewhere relatively cheaply for a shorter period.
ARMs also can be cheaper if they’re paid off at a time when interest rates across the board are low, like now in 2020, but obviously, there’s no guarantee that will happen.
|Loan Type||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help you learn more about rates by loan type.|
|30-Year Loan||30-Year Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||15-Year Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||FHA Refinance Rates|
|30-Year FHA Loan||30-Year FHA Loan Rates||30-Year FHA Refinance Rates|
|VA Loan||VA Mortgage Rates||VA Refinance Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Rates|
|5/1 ARM||5/1 ARM Rates||5/1 Refinance Rates|
|7/1 ARM||7/1 ARM Rates||7/1 Refinance Rates|
|10/1 ARM||10/1 ARM Rates||10/1 Refinance Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Jumbo Refinance Rates|
|30-Year Jumbo Loan||30-Year Jumbo Loan Rates||30-Year Jumbo Refinance Rates|