15-Year Fixed Mortgage

What Is a 15-Year Fixed-Rate Mortgage?

For decades, the 30-year mortgage has been the preferred choice of home buyers due to the lower monthly payments and less stringent qualification requirements. In recent years, the 15-year fixed-rate mortgage has become an increasingly popular option for buyers who want to own their home sooner and get rid of mortgage payments faster.

This mortgage loan type requires you to make regular monthly payments over a 15-year time frame. If you make the payments on schedule, the home will be all yours at the end of the term. The interest rate remains the same for the duration of the loan, so the amount you’re required to pay each month will never change.

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What Are the Benefits of a 15-Year Home Loan?

In addition to offering the opportunity to take full ownership of your home sooner, a 15-year fixed-rate mortgage provides several advantages:

  • Lower interest rates: Because lenders are at risk for a shorter time period with a 15-year mortgage, the interest rate is lower compared to longer loan terms — anywhere from a quarter of a point to a full point in many cases. While this difference might not sound like much, it can reduce your overall cost by tens of thousands of dollars.
  • Builds equity faster: Equity is the difference between your home’s current market value and the amount you still owe. Since 15-year mortgages require larger monthly payments, you’ll accumulate equity more quickly than with a 30-year loan. Equity can serve as a valuable financial asset that helps you build wealth over time.
  • Reduced fees: If your loan is purchased by a federally backed mortgage company like Fannie Mae or Freddie Mac, you could end up paying less in fees known as loan-level price adjustments. These extra costs typically apply only to borrowers who take out 30-year mortgages who have lower credit scores and make a down payment of less than 20%.

What Are Some Disadvantages of a 15-Year Home Loan?

Since you’re compressing your mortgage into a much shorter time frame, you’ll pay more per month for a 15-year loan than a longer-term loan. You may also find it harder to qualify for a 15-year fixed mortgage than a loan with a longer term. Lenders may have concerns about your ability to make the monthly payments, especially if you have a lower income or a marginal credit score or are carrying a heavy debt load.

Contact CIS Home Loans to Learn More and Apply Today

If you’re considering a home loan with a shorter term, CIS can help. We offer some of the most competitive 15-year fixed mortgage rates in the country. And with our exceptional service, you’ll experience a smooth, hassle-free experience. If you’re looking to get into your new home quickly, our average time from application to closing is only 25 days.

Contact us to get your loan application started today!

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