15-year Fixed Rate Mortgage
The fixed rate mortgage is the most popular choice for most home buyers. After all, the payment plan allows for lower monthly payments, and the fixed rate provides predictability; your monthly payment will always remain the same!
So why are more and more buyers turning to a 15-year fixed rate over the more standard 30-year option? While this loan offers the predictability and stability of a fixed-rate, it features even lower interest rates and allows homeowners to pay off their home in half the time. Interest rates tend to be approximately 0.5-0.8% less than the average 30-year fixed rate loan. Currently, Bankrate is quoting the national average at an extremely low 3.3%.
Is a 15-year loan right for you? Monthly payments on a 15-year loan are significantly higher than on a longer payment plan. For obvious reasons, they’re not always the best choice for many buyers on a budget. However, if you’re monthly budget allows for a 15-year loan, it is an option worth considering; you’ll save significantly over the life of the loan! To calculate affordability and monthly payments, be sure to use EveryHome’s Closing Costs Calculator and calculate 15 years vs 30 years in the left hand side.