15 Year Fixed Mortgage
15-Year Mortgage
If you’re thinking about buying a home, you may have heard of a 15-year mortgage or a 30-year mortgage, but what do these terms mean? A 15-year mortgage means that the duration of the loan is only 15 years long. That’s significantly less time than the traditional 30-year loan, which lasts 30 years from the date you sign on the dotted line.
A 15-year fixed-rate mortgage maintains the same interest rate and monthly principal-and-interest payment over the 15-year loan period. While the loans provide a fixed principal and interest payment, you’re not stretching out the payments for as long as the traditional 30-year mortgage — and that saves a great deal of interest.
A 15-year mortgage lets you pay off your house in half the time, saving thousands of dollars in interest. But you’ll also be paying more each month—so make sure to adjust your budget accordingly.
Compared to 30-year mortgages, 15-year mortgages are less costly because they require far less interest paid. The tradeoff, however, is that you’ll need to pay more per month than you would with a 30-year loan.
