Current 15-Year Mortgage and Refinance Rates

Today's 15-Year Mortgage Rates

On Monday, September 21, 2020, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the benchmark 15-year fixed mortgage rate is 2.480% with an APR of 2.700%. The average 15-year jumbo mortgage rate is 2.470% with an APR of 2.510%. If you're looking to refinance, the average 15-year refinance rate is 2.490% with an APR of 2.630%. View the table below for rates and APRs for a variety of loan types.

The table above brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive 15 year mortgage interest rates. This interest rate table is updated daily to give you the most current rates when choosing a 15 year mortgage home loan.

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.

1. Interest rates are generally lower on 15-year mortgages compared with 30-year loans.
2. 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 make 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 the 15-year mortgage, so you can see how it fits into your financial goals.

Pros:

• 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), which means less total interest paid.
  

  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 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 with 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.

Cons:

• You 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.

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

Every tax season, homeowners paying a mortgage who itemize have a chance to deduct interest. For folks with a 15-year home loan, they will stop getting this deduction sooner than homeowners with a 30-year mortgage.

The Tax Cuts and Jobs Act (TCJA), 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. For taxpayers who use married filing separate status, the home acquisition debt limit is $375,000.

Although it’s never fun to lose a deduction, the amount of money people with shorter-term mortgages save on interest will usually be more than they can save with the tax 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.