A 20-year fixed-rate mortgage splits the difference between the most common, a 30-year-fixed rate mortgage, and the most ambitious, a 15-year fixed rate mortgage.Get current interest rates for 20-year fixed-rate mortgages here. Be sure to check back regularly, as rates change.

What is a 20-year fixed-rate mortgage?

A 20-year fixed-rate mortgage means you agree to pay off the loan in at least 20 years with an interest rate that doesn’t change throughout the life of the loan.

What are the advantages of a 20-year fixed-rate mortgage?

The 20-year fixed rate mortgage usually has a lower interest rate than a 30-year fixed-rate mortgage. Additionally, since you’ll be paying less interest over a shorter amount of time, your total interest payment will be significantly lower.

This is attractive to folks who want to pay less interest over the life of their loan, while maintaining manageable monthly payments. These borrowers will pay less each month than those who opt for 15-year fixed rate mortgages.

You’ll also pay off your house 10 years faster than you would with a 30-year mortgage. For people who want to minimize debt or those nearing retirement, a 20-year mortgage is certainly worth considering.

What are the disadvantages of a 20-year fixed-rate mortgage?

Compared with shorter terms, like a 15-year fixed-rate mortgage, home buyers who choose the 20-year option will pay more in interest over time. This happens for two reasons: the interest is higher on mortgages with longer terms and you’ll also be paying interest for a longer period of time.

Comparing 20-year and 30-year fixed-rate mortgages

Here are two scenarios: one where a $200,000 house is paid off with a 20-year mortgage and the other with a 30-year mortgage without a down payment. You can see the differences in both monthly payments and total interest.

20-year fixed mortgage rate vs 30-year fixed mortgage rate:

20-year mortgage 30-year mortgage
Mortgage value $200,000 $200,000
Interest rate 4.0% 4.5%
Monthly payment $1,211 $1,013
Interest paid over first 5 years $35,426 $43,118
Total interest paid $90,992 $164,813

*Interest rates differ because 20-year fixed rate mortgages typically have lower interest rates than a 30-year fixed rate.

Your monthly payments are $198 lower with a 30-year loan, but you pay an additional $73,821 in interest over the life of the loan.

Don’t forget to factor in property taxes, mortgage insurance (if you put less than 20 percent down), homeowners insurance, HOA fees, utilities and maintenance expenses when setting your monthly housing budget.

Remember that the mortgage rate you qualify for varies depending on your down payment amount, credit profile, income and other factors. Learn more about how to get the best mortgage rate.