15 Year Mortgages

Having a short-term, 15-year mortgage allows borrowers to know exactly what their principal and interest payments will be for 180 months. It’s simple, a 15 year mortgage is a fixed rate loan so there are no surprises. Unlike an adjustable rate mortgage, a borrower can lock in on a favorable mortgage rate and avoid the threat of a rising interest rates. From there, things will remain constant and predictable unless the borrower chooses to refinance their loan in the future.

15 year mortgages amortize over 180 months versus 360 months with a 30 year loan. Borrowers should feel confident in their ability to absorb higher monthly payments in the event of a temporary loss of work or other financial hardships.

Although 15 year home loans mean larger monthly payments, the flip side is that homeowners are able to build up their home’s equity more quickly. The reason this is possible is due to the fact that the holders of these types of loans are paying off more of the interest sooner than those with longer term loans. Interest rates on 15 year fixed rate mortgages are often lower than that of 30 and 20 year loans.