15-Year Mortgage Rates: Compare Today’s Rates - NerdWallet (2024)

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15-Year Mortgage Rates: Compare Today’s Rates - NerdWallet? ›

Compared to a 30-year loan, a 15-year mortgage can carry an interest rate that's about three-quarters of a percentage point lower. In fact, 15-year loans are some of the cheapest money you'll find. That's the upside.

Compared to a 30-year loan, a 15-year mortgage can carry an interest rate that's about three-quarters of a percentage point lower. In fact, 15-year loans are some of the cheapest money you'll find. That's the upside.

Mortgage rates are expected to decline when the Federal Open Market Committee cuts the benchmark interest rate, which is likely to happen in the second half of 2024. Cooling inflation and a slowing job market could strengthen the Fed's position and put some much-needed relief on interest rates.

The 15-year mortgage has some advantages when compared to the 30-year, such as less overall interest paid, a lower interest rate, lower fees, and forced savings. There are, however, some disadvantages, such as higher monthly payments, less affordability, and less money going toward savings.

Historically, mortgage rates tend to be lowest during the winter months, particularly in December and January. However, rates can vary significantly from year to year, so it's essential to keep an eye on current real estate market conditions.

Lenders charge a lower interest rate for 15-year loans because it's easier to make predictions about repayment over a 15-year horizon than it is over a 30-year horizon. Another reason for the savings? Home buyers are borrowing the money for half the time, which dramatically reduces the cost of borrowing.

Make Biweekly Payments

This strategy can shave four to six years off a typical 30-year loan, depending on your interest rate. On a 15-year mortgage, biweekly payments may cut one to three years from the repayment time, depending on the loan amount and interest rate.

Will mortgage rates ever be 3% again? ›

In summary, it is unlikely that mortgage rates in the US will ever reach 3% again, at least not in the foreseeable future. This is due to a combination of factors, including: Higher Inflation: Inflation is currently at a 40-year high in the US, and the Federal Reserve is raising interest rates to combat it.

Once you find a rate that is an ideal fit for your budget, lock in the rate as soon as possible. There is no way to predict with certainty whether a rate will go up or down in the weeks or even months it sometimes takes to close your loan.

There are no sources for officially projected interest rates in five years, but the Mortgage Bankers Association does predict rates on 30-year mortgages will drop to 6% by the end of 2025. Fannie Mae predicts a 6.3% rate.

Benefits of a 15-year fixed mortgage

The difference reflects their shorter lifespan: Because the lender assumes fewer years of risk, it offers a better rate. Faster accumulation of home equity: By paying back the loan's principal faster, you'll build equity sooner in your home.

It suggests that homeowners who can afford substantial extra payments can pay off a 30-year mortgage in 15 years by making a weekly extra payment, equal to 10% of their monthly mortgage payment, toward the principal.

2. Your loan could be more difficult to qualify for. Since a 15-year loan has higher monthly payments, you may have more difficulty qualifying for the loan depending on your financial credentials.

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The higher your score is, the less you'll pay to borrow money. Generally, 620 is the minimum credit score needed to buy a house, with some exceptions for government-backed loans.

15-Year Fixed Mortgage Benefits

Your interest rate is fixed for the life of the loan, so you don't have to worry about rising rates. You can buy a home with as little as 3% down. You can refinance your home for up to 97% of its value.