15-Year Fixed Mortgage Overview
What Is A 15 year Fixed Mortgage?
A 15-year fixed mortgage refers to a mortgage with a fixed, specific rate of interest that will not change over the course of 15 years.
Your monthly payment for a 15-year fixed mortgage will remain the same each month for 15 years. The breakdown of how much of your monthly mortgage payment goes towards principal and interest will change over the life of the loan. The payments will be spread out over 15 years, with principal and interest-paying the largest portion.
Recent popularity has seen 15-year fixed mortgages rise in demand. A 15-year fixed mortgage is a great option if you have low rates and can afford the higher monthly payments. It allows you to pay off your mortgage sooner, build equity faster, and save thousands of interest.
Benefits Of A 15 Year Fixed Mortgage
If you put less than 20% down, there is less mortgage insurance.
If you are looking to pay off your loan quickly while still owning your house, this is an option.
Do you want your mortgage to be paid off before major life events like your child's birth, retirement, etc?
Rates for 15-years are lower than fixed rates for 30-years.
It is great to lock in a steady, safe rate, even if the rates are low.
In a short time, you can pay off your mortgage completely. Some people hate the idea of owing money to anyone.
You can build equity faster than you would with a longer-term loan.
You can save a lot of interest by getting a shorter loan term.
Disadvantages Of A 15 Year Fixed Mortgage
A high monthly payment can mean that you don't have enough cash in case of an emergency, such as a job loss or for other reasons.
You might be unable to invest or diversify your investments due to a high monthly payment.
You can deduct less mortgage interest on your taxes.
Inflation is expected to rise. Your income and other expenses may increase, but your mortgage payments won't. Therefore, it is cheaper to obtain a 30-year fixed loan.
To get equity out of your home investment, you would have to either sell the property or obtain a loan for it.
