15 Year Fixed Rate Loans
Are 15 Year Fixed Rate Loans Right For You? Find Out Here
15 year fixed rate loans are growing in popularity. Generally speaking, the longer the term of the fixed rate loan the more interest you will pay, and the higher that interest rate will be. However, the monthly payments will be lower. The shorter the repayment timeframe, the lower the interest rate will be and the quicker you will pay off the loan. However, the monthly payments will be larger.
What is a 15 year fixed rate loan?
Like a 30 year fixed rate loan, a 15 year fixed rate loan has an interest rate that remains fixed for the length of the mortgage. The interest rate can never go up, and the length of the loan remains unchanged.
Who is a good choice for a 15 year fixed rate loan?
Folks that want a steady, unchanging monthly payment make good candidates. Also people who want a shorter term loan that they can pay off more quickly. However, they must be able to tolerate a higher monthly loan payment.
Benefits of 15 year fixed rate loans
• The principal and interest stay the same so you can easily set your budget.
• You are protected from rising interest rates, as your rates can never go up.
• Good choice if you plan to stay in the home for at least the length of the loan
• The length of the loan never changes so it is easy to budget your payments
• Your loan is paid off much sooner than other kinds of home mortgages
• You will pay a lower interest rate on a 15 year fixed than other kinds of mortgages
Downside of 15 year fixed rate loans
• Monthly payments are much higher on a 15 year compared to a 30 year. This makes the loan harder to qualify for, and mortgage and tax deductions are less on a 15 than a 30 year fixed loan.
The 15 year fixed rate loans are fantastic for people with the resources to pay the larger monthly mortgage payment. However, they may not be a good choice for everyone.