Lower Rates & Less Interest Paid
15-Year Fixed-Rate
A 15-year fixed-rate mortgage is an excellent choice for homeowners who want to build equity faster and pay off their loan sooner. While the monthly payments are higher compared to a 30-year term, the shorter repayment period allows you to save significantly on interest over the life of the loan.
Benefits
- Pay off your mortgage faster and reduce the total interest paid over time
- Enjoy lower interest rates compared to 30-year fixed loans
- Predictable monthly payments with a fixed rate
- Build home equity at a quicker pace
Eligibility
- As little as 3% down payment required for low-balance loan amounts
- 5% down payment required for high-balance loan amounts
- Loan amount must fall within your county’s conforming loan limits
- Minimum credit score of 620
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What is a 15-Year Fixed-Rate Mortgage?
A 15-year fixed-rate mortgage is a type of home loan that keeps the interest rate consistent for a shorter period compared to the traditional 30-year loan.
Choosing this option ensures your interest rate remains steady for the entire life of the loan, which is especially attractive for buyers who want stability in their monthly payments—unlike renters who often face yearly rent increases due to inflation or rising living costs.
This loan program is ideal for those who want to secure lower interest rates while still benefiting from predictable monthly payments. Although a 15-year loan may reduce your purchasing power compared to the lower payments of a 30-year mortgage, it allows you to build equity faster and pay off your home sooner. At Barrett Financial Group LLC, we present this loan as a strong alternative to traditional financing programs, including Conventional, FHA, VA, and Jumbo loans.
What are interest rates for a 15-year fixed-rate mortgage?
On average, 15-year fixed-rate loans can be about 0.5% to 1% lower than 30-year fixed-rate mortgages. This makes them attractive for buyers who may not need to finance a home but want to use the leverage of a mortgage instead of paying entirely in cash.
Is a 15-year fixed-rate loan worth the interest savings?
Because of the shorter term, borrowers pay significantly less in interest over the life of a 15-year loan compared to a 30-year fixed mortgage. However, financially strategic buyers who take the savings from the lower monthly payments of a 30-year loan and invest them with a modest 5% annual return often see a higher overall net worth.
After 15 years, the 15-year mortgage will be fully paid off, but the value of an investment account earning 5% annually for the same period can surpass the remaining balance on a 30-year loan. For this reason, Jeremy will often recommend carefully weighing both options, since long-term market returns can sometimes provide greater financial benefits than paying off a home quickly.
Pros of a 15-Year Fixed-Rate Mortgage
With a 15-year fixed-rate mortgage, homeowners build equity at a much quicker pace compared to those with a 30-year loan since the balance is paid down in half the time. This faster equity growth can be an advantage if you ever want to access funds from your home for renovations, upgrades, or future expansions. Thanks to the lower interest rate and shorter repayment term, a 15-year fixed-rate loan from Jeremy Boillot positions you to pay off your mortgage faster than nearly any other option.
Lower Overall Interest Paid
One of the biggest advantages of a 15-year mortgage is paying significantly less in interest. Let’s look at an example: if you take out a $500,000 loan at a 4.5% fixed interest rate over 15 years, the total interest paid would be about $188,493. In comparison, a 30-year fixed-rate loan averages a higher interest cost. Based on the past 5 years, the interest rate for a 15-year fixed loan has been around 0.65% lower than its 30-year counterpart. With a 30-year loan at 5.125%, you’d pay about $412,032 in interest—over $223,000 more than the shorter option.
By choosing a 15-year fixed-rate mortgage through Jeremy Boillot with Barrett Financial Group, LLC, these savings could be redirected toward retirement planning, education expenses, medical needs, or even future home improvements.
Want to see how much interest you could save? Try our Amortization Calculator.
Faster Route to Free and Clear Ownership
Homeownership is more than just fulfilling a basic need—it’s one of the most effective ways to build long-term wealth and financial security. A home is often a family’s largest asset, and paying it off in the shortest time possible allows you to maximize equity growth and remove one of the most significant debts from your financial profile. With a 15-year fixed-rate mortgage, you can achieve free and clear ownership much faster, creating an asset that can be passed on to future generations.
Cons of a 15-Year Fixed-Rate Loan
Higher Monthly Payments
The biggest drawback of a 15-year mortgage is the higher monthly payment. Because the repayment period is cut in half compared to a traditional 30-year loan, the monthly cost is significantly higher. For many buyers, a home purchase is the single largest financial commitment they will ever make, and spreading payments over 30 years provides needed breathing room in their budget. In most cases, buyers who pursue a 15-year loan either have the cash to purchase outright or a substantial down payment, making the shorter term more of a luxury choice for securing the lowest possible interest rate.
Lower Purchasing Power
Choosing a 15-year loan also limits your purchasing power. Since monthly payments are higher, buyers qualify for smaller loan amounts compared to a 30-year term. Extending to 30 years can lower your payment by thousands of dollars, which in turn increases the purchase price you can qualify for. For buyers seeking to maximize their purchasing power—especially in competitive markets—a 30-year fixed-rate loan may be the smarter choice.
Interest Savings vs. Market Returns
While a 15-year mortgage saves you money on interest, it also ties up more of your monthly income in your home, leaving less flexibility for other investments. Historically, the stock market has delivered much higher average returns than the <1% difference in interest rate savings between 15-year and 30-year loans. By investing the savings from a 30-year loan into the market, many buyers end up with a higher net worth in the long run.
When Is the Best Time to Consider a 15-Year Fixed-Rate Mortgage?
A 15-year fixed-rate mortgage is an excellent option for buyers who want predictable monthly payments and significant savings on total interest paid over the life of the loan. It works best for borrowers who are financially comfortable with higher monthly payments and want to pay off their home much faster.
When Interest Rates Drop
One of the best times to lock in a 15-year loan is when interest rates fall. Savvy borrowers take advantage of low rates to secure long-term savings, ensuring that even if the market shifts and rates rise in the future, their payments remain stable while interest costs stay minimized.
Refinancing Midway Through a 30-Year Loan
If you’re already halfway through a 30-year mortgage, refinancing into a 15-year fixed-rate loan can be a smart move. This allows you to benefit from lower interest rates while still staying on track to pay off your mortgage within the same timeframe. However, the rate reduction should generally be at least 0.5% or more to make the refinance worthwhile, since most of the interest on a 30-year loan is front-loaded in the first 15 years.
Personalized Guidance Matters
Deciding whether to refinance or switch to a shorter term depends on your income, budget, and long-term financial goals. Consulting with Jeremy Boillot can help you evaluate your unique situation and make an informed choice.
Mortgage Insurance – What It Is and When It’s Required
Mortgage insurance is an added layer of protection for lenders in case a borrower defaults on their loan. It is typically required when buyers make a smaller down payment, allowing them to purchase a home with far less than the traditional 20% down that was once the standard. While it may feel like an extra cost, mortgage insurance has made homeownership accessible for millions of buyers who would otherwise struggle to save for a large down payment.
Government-Backed Loans and Mortgage Insurance
Certain government loan programs come with mandatory mortgage insurance. For example, FHA loans require both an upfront mortgage insurance premium and an ongoing monthly premium, which must be paid for the life of the loan. VA loans, on the other hand, don’t have monthly mortgage insurance but do require an upfront funding fee, which works similarly to the FHA upfront premium.
Mortgage Insurance and Loan Terms
Mortgage insurance costs can vary depending on the type and length of your loan. In most cases, 15-year fixed-rate mortgages carry lower mortgage insurance costs than 30-year loans. Since the loan is paid off in half the time, lenders face less long-term risk, and borrowers build equity much faster, which helps reduce the overall insurance expense.
Down Payment Options for a 15-Year Fixed-Rate Mortgage
With a 15-year fixed-rate loan, buyers can still benefit from some of the most flexible down payment options available. The exact requirement depends on the type of financing you choose:
Conventional Loans:
3% minimum for low-balance loans
5% minimum for high-balance loans
FHA Loans: 3.5% minimum
VA Loans: 0% down payment required
Jumbo Loans: 10% minimum (20% down provides the best pricing and terms)
Is a 15-Year Fixed-Rate Mortgage Right for You?
There’s no one-size-fits-all answer when it comes to mortgage financing. A 15-year fixed-rate loan offers unique advantages, but whether it’s the right choice depends on your financial goals, monthly budget, and long-term plans. The best way to know for sure is to speak with Jeremy Boillot and the team at Barrett Financial Group. Our team will walk you through payment scenarios, share the most up-to-date interest rates, and help you evaluate if this option aligns with your needs.