15 Year Fixed Mortgage


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15 Year Fixed Mtge

This mortgage has the same benefits of a 30 year loan but it is paid in full in half the time. It also has a fixed rate with set monthly payments but you own your home in 15 years! The monthly payments are therefore much higher but this is smart financial planning, if the payments are affordable.

If you chose a 15-year fixed-rate mortgage you’ll be paying a monthly payment for 180 months. Similar to the 30-year fixed-rate option your interest rate and payment will never change. The main benefit of a 15-year fixed mortgage rates is the ability to pay off your home in half the time (compared to a 30-year fixed).

Knowing your payment amount enables the homeowner to budget accordingly. The homeowner can also be better prepared for unexpected expenses.

Qualifying For A 15-Year Fixed-Rate Mortgage:

The qualifications for a 15-year fixed-rate mortgage are fairly basic. Your Debt-To-Income ratio should be below 45% and at least 3% down (or 3% equity).

You’ll need to be employed, retired or if you are self-employed, you’ll need at least two years of tax returns to show self-employment income.

It’s more difficult to qualify for a 15-year fixed rate mortgage because your mortgage payment is almost double that of a 30 Year Fixed Rate Mortgage payment.

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Benefits Of A 15-Year Fixed-Rate Mortgage:

  • You’ll pay off your house much faster
  • Lower interest rate means less interest you’ll pay to the bank
  • Larger upfront yearly tax benefit since you’ll be paying a higher payment (check with your CPA). Over time though this tax benefit dwindles as more of your payment goes to principal.
  • Once your loan is paid off in 15 years you can put that money to work somewhere else while someone on a 30-year fixed will be paying for another 15 years.
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