If you’ve ever wondered “What is a 15-year fixed-rate mortgage?” then this is the perfect article for you. The lending world is full of different types of loans, each one of which offers different characteristics that are important to know about. What may be less desirable for one buyer could be a great fit for another. Continue reading to discover this loan type’s specific advantages and disadvantages.
A 15-year fixed-rate mortgage is a loan in which the mortgage is amortized over a 15-year period instead of a 30-year period. While 30-year mortgages tend to be more common, 15-year mortgages present home buyers flexibility in how fast and aggressively they’d like to pay off their loan. The monthly payment owed on this loan type is higher than a 30-year mortgage, which may be desirable based on your personal goals. As the name implies, a 15-year fixed-rate mortgage maintains the same interest rate through the life of the loan.
Differences Between 15-Year and 30-Year Mortgages
One key difference between these two types of mortgages is that 15-year mortgages feature higher monthly payments. This is because banks and lenders want to offset the shorter loan life by asking for higher repayments from the start. However, the shorter loan period often means lower interest rates are available, which is another difference and an appeal for some buyers.
Why a 15-Year Mortgage May Be Right for You
If you make a sizeable income, enjoy moving frequently, or want to take advantage of lower interest rates, a 15-year fixed-rate mortgage may be a great fit. The short loan period allows your lender to recoup their costs sooner and also allows you the opportunity to fully pay down your loan on a faster schedule. It’s also a way to protect your income from the risk of higher interest rates in the future. Now that the question, “What is a 15-year fixed-rate mortgage?” has been answered for you, we’d love to help you further! Streamline Mortgage provides multiple types of loans in the Henderson, Reno, and Las Vegas areas of Nevada. Contact us here to speak with us about 15-year mortgages or any other loan that we offer!