Compare Today’s 15-Year Mortgage Rates in the US: Find the Best Options

A 15-year mortgage can save you $375,000 in interest. Why? For a $500,000 loan, the 15-year option at 5.96% costs $4,208/month, totaling $757,530. The 30-year option at 6.46% costs $3,147/month but totals $1,132,987.

This means you'd pay an extra $375,457 in interest with the 30-year option. While the 15-year mortgage requires higher monthly payments, it offers better savings in the long run.

The blog explores the pros, cons, and everything you need to know about 15-year fixed mortgages. It helps you decide if they fit your financial goals.

A home loan allows borrowers to pay off their mortgage over 15 years at a fixed interest rate. This means the monthly payment stays the same for the life of the loan. It helps you stay stable, even when interest rates go up and down.

• Amortization: Payments are structured so that each month, a portion goes towards the principal and a portion towards interest. Over time, more of the payment goes toward reducing the principal balance.

• Higher Monthly Payments: The loan is paid off in half the time of a 30-year mortgage. So, monthly payments are higher. However, this results in less total interest paid over the life of the loan.

As of February 2025, the average rate for a 15-year fixed mortgage in the U.S. is approximately 5.96%. This marks a slight decrease from the previous week, where the rate stood at 6.27%.

Historically, 15-year mortgage rates have averaged around 5.19% since 1991. The recent decline in rates is attributed to a fall in bond yields, particularly the U.S. 10-year Treasury yield.

When bond yields, especially the U.S. 10-year Treasury yield, decline, mortgage rates typically follow. Lenders use Treasury yields as a benchmark for setting mortgage rates.

Despite these fluctuations, mortgage rates have stabilized but remain high due to persistent inflation pressures. Experts predict that rates may hover around the mid-6% range for the foreseeable future.

When choosing between a 15-year and a longer mortgage, you must consider the advantages and disadvantages.

• Interest Savings: Paying off the loan in 15 years can result in significant interest savings over the life of the loan.

• Equity Building: Faster repayment means you build equity in your home more quickly.

• Predictable Payments: Fixed rates provide stability in your monthly budgeting.

• Higher Monthly Payments: A shorter term means higher monthly payments. This may strain your budget.

• Qualification Challenges: Higher payments might limit the loan amount you can qualify for.

• Opportunity Cost: Allocating more funds to mortgage payments could limit other investment opportunities.

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When deciding between a 15-year and a 30-year mortgage, it's important to consider your financial goals, budget, and lifestyle. Both options have pros and cons. They can greatly affect your finances.

The most apparent difference between a 15-year and a 30-year mortgage is the monthly payment amount. Here’s a quick comparison:

• 15-Year Mortgage: Higher monthly payments, but you pay off the loan in half the time. For example, on a $300,000 loan at a 6.36% interest rate, the monthly payment would be approximately $2,550.

• 30-Year Mortgage: Lower monthly payments spread over a longer period. Using the same loan amount and interest rate, the monthly payment would be around $1,850.

This difference can impact your budget significantly. A higher monthly payment means less disposable income for other expenses or savings.

Another factor to consider is the total interest paid over the life of the loan:

• 15-Year Mortgage: The total interest paid on a $300,000 loan at 6.36% would be about $92,000.

• 30-Year Mortgage: The total interest paid on the same loan at the same rate would be approximately $240,000.

Selecting a 15-year mortgage can lead to a huge reduction of nearly $148,000 in interest payments. This results in more funds to be allocated to other investments or savings.

Refinancing to a 15-year mortgage is an excellent strategy for homeowners looking to save on interest and pay off their loans faster. Here’s how you do it:

• Evaluate Your Financial Situation: Check if your current mortgage rate is higher than current market rates. If so, refinancing may be beneficial.

• Check Your Credit Score: A higher credit score can help you secure better rates. Aim for a score above 700 for optimal rates.

• Gather Documentation: Prepare necessary documents such as income verification, tax returns, and details of your current mortgage.

• Shop Around for Lenders: Compare offers from multiple lenders to find the best rates and terms.

• Submit Your Application: Once you’ve chosen a lender, submit your application and provide all required documentation.

• Close on Your New Loan: After approval, review closing costs and finalize your new loan agreement.

Refinancing to a 15-year mortgage can be beneficial if you aim to pay off your home faster and save on interest. However, it's important to make sure that the higher monthly payments fit comfortably within your budget.

• Interest Savings: Paying off the loan in a shorter time frame reduces the total interest paid.

• Equity Acceleration: Build equity in your home more quickly.

• Financial Freedom: Eliminate mortgage debt sooner, freeing up funds for other financial goals.

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It is important to avoid surprises during the mortgage selection process to secure the best deal.

• Ignoring Total Loan Costs: Focusing only on monthly payments can increase costs. It ignores the total interest paid over the loan's life.

• Underestimating Monthly Payment Impact: A 15-year mortgage has higher monthly payments. If not planned for, they can strain your budget.

• Neglecting to Shop Around: Not comparing offers from multiple lenders can result in missing out on better rates and terms.

• Ignoring Prepayment Penalties: Some mortgages have penalties for early repayment. Be aware of these before committing.

• Not Considering Future Income Changes: A mortgage that ignores future income changes can cause financial strain.

A 15-year fixed mortgage can save you money on interest and help pay off your home faster, but it comes with higher monthly payments. It's important to weigh the pros and cons carefully and ensure the monthly commitment fits your budget.

For a fresh approach to an affordable home-buying experience, explore Realpha. Our AI-driven platform removes the standard 3% buyer-side commission.

To put this into perspective, on a $300,000 home, a 3% commission amounts to $9,000. By removing this fee, your overall buying cost decreases significantly. This savings can cover several months of mortgage payments.

15-year fixed mortgage rates are usually lower than 30-year rates. This saves a lot of interest. However, they come with higher monthly payments due to the shorter loan term.

To get the best rate, keep a high credit score. Reduce your debt-to-income ratio. Then, compare offers from multiple lenders.

Advantages include lower interest rates and faster equity buildup. Disadvantages involve higher monthly payments and less financial flexibility.

Realpha makes your home-buying journey easier. It removes buyer's agent fees, which could save you up to 3% of the home's price.

Find the Perfect Mortgage for Your Dream Home with Be My Neighbor

Compare options, calculate payments, and get expert guidance all in one place

Get Pre-approved