Compare Today’s 15-Year Fixed Mortgage Rates
Andrew Dehan8-minute read
November 17, 2021
Wondering what current 15-year mortgage rates look like on residential homes? We don’t blame you – they’re important to consider when thinking about financing a real estate investment purchase and/or becoming a first-time or repeat home buyer.
Certainly, considering whether to take out a 15-year mortgage means having to ask yourself questions like: What are 15-year mortgage rates at the current moment – and how will they impact my monthly budget? But there are other pros, cons and variables to consider as you go about deciding if a 15-year fixed mortgage (and associate rates) makes sense for you.
Simply read on to learn more about the current 15-year mortgage rates, as well as various upsides and downsides to them that you’ll want to keep on your radar.
Types Of 15-Year Mortgages
A 15-year mortgage is defined by its term length and is one of several kinds of fixed-rate mortgages that you can apply for. These loans have an interest rate which is fixed at the time of closing, vs. adjustable-rate mortgages, or ARMs, whose rates can change over the life of the loan. They can be used to purchase a home or refinance an existing mortgage.
Note that current 15-year mortgage rates are prone to fluctuation. Market timing, external economic forces, and even the individual lender that you choose to apply with may impact the 15-year mortgage rate that you receive. As lenders look to various financial history markers as a measure of borrower risk, note that your personal credit score and credit history will also influence the 15-year interest rates that you’ll be afforded.
In general, the long-term upside of a 15-year fixed-rate mortgage is that it costs you less than alternate mortgage options over the life of the loan. That’s because interest rates are typically lower and loans are paid off at a faster clip, so you’ll pay less in interest overall. But at the same time, 15-year mortgages also come with higher monthly payments attached than loans that offer longer repayment terms such as 30-year fixed-rate conventional loans, potentially putting a strain on your household budget.
Types Of 15-Year Mortgages
Several government agencies offer 15-year mortgages, even though they are typically offered in the form of conventional loans. For example, the Federal Housing Administration (FHA) and Veteran’s Administration (VA) both offer 15-year mortgages in competitive packages.
FHA loans, which are primarily aimed at assisting lower-income households and first-time home buyers, come with a lower credit score requirement (Rocket Mortgage® requires a minimum of 580) and a 3.5% down payment minimum attached. But at the same time, it’s also worth noting that FHA loans come with higher interest rates and certain minimum income eligibility requirements.
VA loans are designed to support veterans, active duty servicemembers, and qualifying surviving spouses. Like FHA loans, they’re built to make homeownership more accessible to certain home buyers. For example, VA loans come with no down payment minimums attached, and require borrowers to meet lower credit score thresholds.
USDA loans, which are offered by the U.S. Department of Agriculture (USDA), are a type of mortgage loan that is available to borrowers in certain rural areas. They can also be had in the form of 15-year mortgages if you like. These loans are typically designed for low-income Americans with poor credit and may come with more favorable fee structures and zero down payments attached. Rocket Mortgage does not offer USDA loans.
As above though, you can also opt for 15-year conventional loans, which come with lower down payment requirements than FHA loans (3% minimum), but come with higher credit score requirements (620 minimum) as well.
|Loan Option||Rate / APR|
|15-Year Fixed*||2.75% / 3.152%|
- Listed rates are offered exclusively through Rocket Mortgage.
- Mortgage rates could change daily.
- Actual payments will vary based on your individual situation and current rates.
- Some products may not be available in all states.
- Some jumbo products may not be available to first time home buyers.
- Lending services may not be available in all areas.
- Some restrictions may apply.
- Based on the purchase/refinance of a primary residence with no cash out at closing.
- We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-income ratio is less than 30%; and credit score is over 720; or in the case of certain Jumbo products we assume a credit score over 740; and an escrow account for the payment of taxes and insurance.
- The lock period for your rate is 45 days.
- If LTV > 80%, PMI will be added to your monthy mortgage payment, with the exception of Military/VA loans. Military/VA loans do not require PMI.
- Please remember that we don’t have all your information. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. Quicken Loans offers a wide variety of loan options. You may still qualify for a loan even in your situation doesn’t match our assumptions. To get more accurate and personalized results, please call to talk to one of our mortgage experts.
What Are The Current 15-Year Mortgage Rates?
You can view up-to-date mortgage rates with Rocket Mortgage. This page gives the latest daily information on 15-year fixed-rate mortgages in comparison with other mortgage types. You can also view mortgage rate trends over the past year to research and determine when the best time is for you to apply or refinance for a home loan.
Historical 15-Year Mortgage Rates
Rewind the Wayback Machine, and you’ll find that the 15-year mortgage was first introduced several decades ago back in 1991. At the time that the 15-year mortgage appeared on the market, its initial rate was set to 8.79%, according to Freddie Mac. A look at the history books reveals that it peaked at its highest rate in January 1995, topping out at 8.80%. Following this high point, the 15-year rate then fluctuated from between 6.36% – 7.4% throughout the rest of the 1990s.
Coming into the dawn of the millennium, 15-year rates began to trend on a downward slant from an average of 7.725% in 2000 to an average of just 5.17% by 2003. Credit for this more than 2.5% drop in rates can largely be laid at the feet of the 2001 recession. Following this financial downturn, rates then averaged between 5% – 6% until 2008, at which time the subprime mortgage crisis happened, leading to a major downswing in the economy.
Responding to the pressures introduced by the Great Recession, the Federal Reserve (Fed) then dropped interest rates even lower, leading to a decrease in home mortgage loan expenses. Rates effectively bottomed out in late 2012 at 2.66% before creeping back up to 4% by 2018. Following the COVID-19 pandemic of 2020, the Fed slashed interest rates, leading to historic low rates on 15 year-mortgages of under 2.5%. Since this time, given ongoing economic uncertainty in America, rates have continued to hover at attractively low levels, ensuring that 15-year fixed-rate mortgages remain a popular option with many borrowers.
The Pros And Cons Of A 15-Year Mortgage
As with any home mortgage loan and financial product, a 15-year mortgage comes with benefits and drawbacks attached. Readers considering applying for or refinancing to a 15-year mortgage would do well to consider their budgets, financial goals, and individual situations when deciding which mortgage type and term to pursue.
Pros Of A 15-Year Mortgage
You’ll find many upsides attached to 15-year fixed-rate loans that make them attractive to certain groups of home buyers. If your goal is to build equity, pay off your mortgage over a shorter loan term, and pay less in interest, you may find that a 15-year mortgage is the right fit for you.
- Build home equity faster: Paying off your mortgage in 15 years can help homeowners build equity in their home at a faster rate than doing so under the terms of a 30-year mortgage. This equity can then be used along the way to borrow or draw credit against if you need additional funds to make renovations, add upgrades, or DIY improvements. Given lower interest rates, higher monthly payments, and shorter repayment terms, a 15-year mortgage can help you pay off your mortgage faster.
- Lower interest paid overall: Given that paying less money in interest fees is a big draw of the 15-year mortgage, let's run the numbers. Say that your loan amount is $200,000, which is borrowed at an interest rate of 3.0%. This means you will pay out $48,609 over the life of the loan. Compare this to a 30-year fixed-rate mortgage with an interest rate over the past 5 years that has averaged 0.65% higher than its 15-year counterpart. Paying an interest rate of 3.65% on a loan of $200,000 over 30 years means that you'll instead pay $129,371 in interest. That's $80,762 (!!) more that you've potentially paid in interest fees that you could have spent elsewhere (for example, on education or medical needs) or saved for retirement. Want to run the numbers yourself to get a sense of potential cash savings? Use the Rocket Mortgage® mortgage calculator.
- Full ownership faster: Homes are one of the most popular forms of investment in America today. Many property owners look to gains in value that occur over time as a way to recognize significant boosts in savings. If you want to pay off what is likely your largest debt and own your home outright at a faster pace than a 30-year mortgage allows, a 15-year loan could be the right option for you, since it cuts your payoff period in half.
Cons Of A 15-Year Mortgage
While 15-year mortgages come with many benefits, they’re not always the right option for every household or borrower. Some individuals or families may not be able to afford the higher monthly payments that come with these financial offerings, while others may prefer to invest their monies elsewhere.
- Higher monthly payments: The single biggest drawback for most home buyers looking to apply for or refinance to a 15-year loan are the higher monthly payments that are attached to them. In other words: Although they come with lower interest rates, 15-year mortgages also come with heftier monthly expenses that you’ll have to budget for because you’re basically paying your house off in half the time of a 30-year loan. Just how much more of a potential pinch on your pocketbook are we talking here? To return to our prior example, with a $200,000 loan and 3% interest rate, a 30-year mortgage comes with a monthly payment of $675, whereas a 15-year mortgage at the same rate requires you to make a monthly payment of $1,105. That's $430 more that would be added to your monthly payment under the terms of a 15-year mortgage – and neither of these estimated payments includes the additional cost of taxes and insurance.
- Less investment flexibility: Think of it this way: The more that you’re paying out in monthly mortgage payments, the less spare funds that you’ll have to invest in other ventures. Returning to the above example, you could be saving $430 a month ($5,160/year) that you could instead be investing in stocks, bonds, or other investments that could return 6% – 10% a year or more. Case in point: If you were to put these monies in a retirement account each month that delivered a 6% average annual return for 30 years, you’d find yourself with a sum of $407,000 in-hand at the end. Not too shabby, right? Bear in mind: Although many individuals still look to homes as being historically safe investments, given your personal tolerance for risk and financial goals, you may find that the money is better invested elsewhere. To calculate potential returns on investment using your own numbers, and get a better sense of how to make your money work hardest for you, you may wish to use this calculator from Investor.gov.
- Unavailable for some large homes: As lenders want to make sure that you’re able to actually pay them back and to maximize your odds of making timely monthly payments, they’ll often decline to extend 15-year mortgages on certain larger and more expensive properties. In essence, these financial institutions may cap the amount that they’re willing to lend you so as to improve your chances of meeting your financial obligations and lower the odds that you wind up maxing out your budget. Homeowners struggling to deal with these loan caps would benefit instead by looking to a 30-year mortgage.
Should I Refinance To A 15-Year Mortgage?
It all depends on your current situation and expected financial outlook. You’ll want to consider factors such as potential timing, your budget, and your individual or household goals as you contemplate a refinance.
Thinking of making the leap to a 15-year mortgage? You can get your refinance started with Rocket Mortgage today.
When To Refinance To A 15-Year Mortgage
If mortgage interest rates are dropping significantly, you plan on staying in your home for several years, and you’re not close to paying off your current mortgage, you may wish to consider refinancing. However, important to note here is that the cost of your refinancing should be offset by the savings that you stand to receive by securing a new, lower interest rate.
If the market has shifted and rates are favorably low, note that refinancing to a 15-year mortgage may not even wind up changing your monthly payment. Under these circumstances, you could stand to save big on interest without putting a strain on your household budget.
Do you have an adjustable-rate mortgage (ARM)? Also be advised that it’s smart to consider refinancing to a lower fixed-rate home loan product, like a 15-year conventional mortgage, before your rate (and payments) adjust upward.
When Not To Refinance To A 15-Year Mortgage
You will find that there are a few reasons that you might want to avoid refinancing to a 15-year fixed-rate mortgage. For example: There are often significant costs associated with refinancing, such as closing costs, title fees, appraisals, etc. As you weigh your options here, ideally, you’ll want to see an interest rate drop from your current mortgage rate and should consider holding off on refinancing if interest rates are going up from your current rate.
You should also consider waiting on refinancing if you aren't planning on staying in the home long enough to recoup the costs of the refinance.
FAQs On 15-Year Mortgage Rates
Q: How do 15-year mortgage rates compare to 30-year mortgage rates?
A: As a general rule of thumb, 15-year mortgage rates are lower than 30-year mortgage rates. Lenders typically offer lower mortgage rates to home mortgages with shorter loan terms, just one of many differences between 15-year vs. 30-year mortgages. Since 1991, the 15-year fixed rate mortgage has been 0.5% – 0.75% less than the 30-year fixed-rate mortgage.
The main reason that banks offer lower rates on shorter-term home loans is because they are less risky than longer-term loans. A 30-year loan also costs banks more in administration and processing fees – extra costs which they pass onto lenders in the form of a higher interest rate.
Q: How is my mortgage rate determined?
A: Baseline mortgage rates are determined by the market, not individual lenders. Ironically though, the final rate that you’ll end up paying in interest isn’t actually the baseline one. Your lender will determine the final interest rate that you will pay based on several factors that are weighed alongside the baseline, including:
Credit score and credit history: Lenders look to credit scores and credit histories as a snapshot of your financial health. These touchpoints help them determine if you’re perceived to be a responsible borrower, and how likely you are to repay any sums that are lent. But your credit score isn’t necessarily determined by your annual income and the amount of money that you keep in an investment account. Rather, it’s a reflection of several factors, including your past ability to maintain and repay credit. Bearing this in mind, a track record of late or missed payments, high utilization, a short credit history, or not enough diversity in your portfolio can negatively impact your credit. Therefore, a low score indicates that you’ve had trouble in one or more of these areas, signaling that you may be a high-risk borrower.
Home price and down payment: The lower the amount of the purchase price of your home, and the lower the amount that you are seeking to borrow, the lower the level of risk that you present from a lender’s perspective. If the home price is low or you pay a hefty down payment (or both) that brings down your principal balance, you won’t have to borrow as much money, making a loan less risky in financial institutions’ eyes – potentially leading to a better interest rate as well.
Q: How often do 15-year mortgage rates change?
A: Mortgage rates fluctuate daily during the 5-day workweek. They can hold steady from month to month or can shift due to market changes and economic concerns. In the past 20 years, the moments we've seen that have driven the largest shifts in mortgage rates generally have to do with recessions. Historically, greater economic uncertainty leads to lower mortgage rates.
Q: What is a good 15-year fixed mortgage rate?
A: Although 15-year fixed mortgage interest rates are always changing, as we noted earlier, there are a few key factors that distinguish a good 15-year interest rate from one that’s not as compelling.
In addition, don’t forget that daily rates which are posted are averages and whatever rate you're actually offered will depend on factors like your actual credit score, credit history, and debt-to-income ratio.
That being said, a good 15-year fixed rate is at or below the daily average. It typically hovers around 0.5% – 0.75% lower than its 30-year counterpart. Worth noting: Over the past 10 years, 15-year fixed-rate mortgages have averaged between 3.0 – 4.0%.
The Bottom Line
As noted above, 15-year mortgages typically offer lower interest rates than conventional 30-year home mortgages and other home loan products with longer repayment periods. But at the same time, they also tend to come with higher monthly fees attached and may only come in lower amounts.
Current 15-year mortgage rates are determined by baseline market averages, which are then cross-referenced by lenders, who amend them based on different variables before extending borrowers an actual interest rate offer. These variables may include, but are not limited to, a borrower’s personal credit score, credit history, debt-to-income (DTI) ratio, the location of the home, the property’s purchase price, and other factors.
Obtaining a 15-year fixed-rate mortgage can help you build equity in your home faster, pay off your mortgage quicker, and enjoy far greater savings over the total life of the loan. However, if you apply for or refinance to one, you can also expect to be making larger monthly payments and tying more money up (that could otherwise be invested elsewhere) from each paycheck.
Have you weighed the pros and cons and decided that you’d like to apply for a 15-year mortgage? If you’re ready to move forward, you can get started with the loan process today at Rocket Mortgage®.
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