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Current 15-year mortgage rates

Jan. 27, 2023

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Current 15-year mortgage rates

On Friday, January 27, 2023, the national average 15-year fixed mortgage APR is 5.66%. The average 15-year fixed refinance APR is 5.66%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

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How to compare current 15-year mortgage rates

Mortgage rates and terms can vary significantly from one lender to another, so it’s important to shop around for quotes from multiple lenders. As you compare offers, weigh not just the 15-year fixed interest rate but also all the other terms of the loan. Be sure to compare APRs, which include many additional costs of the mortgage not shown in the interest rate. Some institutions may offer lower closing costs and fees than others. Your bank or credit union might offer a special deal to you, as a current customer, but don't be afraid to walk: If you can find a better deal elsewhere, go for it.

Be sure to look at quotes both from online and traditional brick-and-mortar financial institutions. Consider using a mortgage broker, a professional go-between between borrowers and banks, and who can provide rates from wholesale lenders.

Pros and cons of a 15-year mortgage

Let’s look at both the benefits and drawbacks of a 15-year mortgage so you can see how one might fit your financial goals (or not).

Pros

  • You build equity faster. Compared to a 30-year loan, you’ll pay down your balance much more quickly.
  • You’ll pay less interest. Rates on 15-year loans are significantly lower than rates on 30-year loans. What’s more, you pay less interest over the life of the loan.
  • A larger chunk of monthly payments go toward the loan principal rather than interest. With a 30-year mortgage, only a fraction of early payments go to retiring principal. A 15-year loan speeds the process.

Cons

  • Higher monthly payments compared to longer-term loans. If you’re struggling to qualify, a 15-year mortgage will only increase the challenge.
  • The opportunity cost of tying up money in home equity instead of other financial goals. Maybe it makes more sense to borrow more against your house and to invest the proceeds for retirement.
  • The potential loss of mortgage interest tax breaks due to paying less interest. Most Americans no longer benefit from the mortgage interest deduction, but if you do, consider the tax implications.

Differences between a 15-year and 30-year fixed-rate mortgage

A 15-year mortgage means you’ll pay off your loan faster. The rates are lower and the overall interest costs are less. A 30-year mortgage gives you lower monthly payments, and that could allow you to borrow a larger amount. But a 30-year loan comes with a higher interest rate and greater overall cost.

Even if the total amount you’re interested in borrowing would be the same for a 15- or 30-year mortgage, you might have an easier time qualifying for the longer-term loan because its monthly payments are smaller and more manageable.

15-year vs. 30-year mortgage interest and payments

15-year fixed-rate mortgage 30-year fixed-rate mortgage
Loan principal $312,900 $312,900
Interest rate 5.75% 6.50%
Monthly payment $2,598 $1,978
Total interest $154,804 $399,087
Total payments $467,640 $711,987

*Notes: Interest rates as of December 13, 2022; monthly payments do not include insurance or taxes.

If you don’t mind a higher monthly payment, you might find a 15-year mortgage to be a more attractive option than a longer-term loan. If you’re looking to refinance, it’s smart to consider a 15-year loan, especially if you’re more than halfway through repaying your current 30-year loan. Refinancing into another 30-year loan would extend your repayment period, which costs more in the long run.

In addition, a 15-year mortgage might be a good option if you want to retire mortgage-free. Locking in the shorter duration of a 15-year mortgage now, especially if you’re in your 40s or 50s, allows you to pay it off by the time you stop working.

15-year mortgage FAQs

Refinancing into a 15-year mortgage

If you have a 30-year mortgage and are more than halfway through your loan term, refinancing into a 15-year loan with a lower rate can save you thousands in interest. In general, 15-year mortgages have higher monthly payments due to the shorter term — but, depending on how much lower you can cut your rate and the balance of your current loan, your monthly payment might not increase as much as you think it will, or at all.

Whichever type of refinance you pursue, be sure to shop around for rates and compare offers, including lender fees.

Read more about how to refinance your mortgage.

Written by: Jeff Ostrowski, senior mortgage reporter for Bankrate

Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.

Read more from Jeff Ostrowski

Reviewed by: Greg McBride, chief financial analyst for Bankrate

Greg McBride, CFA, is Senior Vice President, Chief Financial Analyst, for Bankrate.com. He leads a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.

Read more from Greg McBride