Compare Today’s 15-Year Mortgage Rates

Conventional home loans come with 30-year mortgage terms, but consider a 15-year mortgage. Your mortgage rate will be lower with a 15-year loan, saving you thousands.For example, a $350,000 home loan with a 30-year mortgage and a 4% interest rate means that the buyer would pay $251,543 in interest. However, a 15-year home loan with the total and a 3% interest rate means the buyer would pay just $85,066. Who doesn’t want to save that much money, right?

It’s recommended to shop around to find the best mortgage rates. However, we use our proprietary SimpleScore methodology to rank and review the best 15-year fixed mortgage lenders.

In this article

    Compare current 15-year mortgage rates

    According to Bankrate’s latest survey of the nation’s largest mortgage lenders, these are the current refinance average rates for a 30-year, 15-year fixed and 5/1 adjustable-rate mortgage (ARM) refinance rates among others.

    Product Interest Rate APR
    30-Year Fixed Rate3.030%3.370%
    30-Year FHA Rate3.240%3.740%
    30-Year VA Rate2.960%3.120%
    30-Year Jumbo Rate3.090%3.210%
    20-Year Fixed Rate2.980%3.270%
    15-Year Fixed Rate2.560%2.890%
    15-Year Fixed Jumbo Rate2.600%2.660%
    5/1 ARM Rate3.060%4.060%
    7/1 ARM Rate2.950%3.960%
    7/1 ARM Jumbo Rate2.910%3.930%
    10/1 ARM Rate3.040%3.910%

    Rates data as of 10/21/2020

    Why trust The Simple Dollar

    Research Methodology

    The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For 15-year mortgage loans, we compared perks, credit impact to check rates, fees, customer satisfaction and product variety. Our ratings are meant to be a directional tool to help you in the process of choosing a 15-year mortgage loan. Be sure to continue your research and shop around for the best 15-year mortgage loan that fits your specific needs.

    Current 15-year mortgage rates overview

    LenderInterest Rate (APR)Minimum Down Payment
    Alliant Credit Union2.625% (2.722%)0% for first-time homebuyers 5% for repeat homebuyers
    New American Funding2.250% (2.610%)3%
    Bank of America2.275% (2.705%)3%
    Rocket Mortgage2.375% (2.833%)3%

    Rates accurate as of July 22, 2020

    Best for low down payment – Alliant Credit Union

    Cash back isn’t just for credit cards and rebates — Alliant offers a hefty sum to customers who use its network of real estate agents and loan officers.

    J.D. Power Rating
    N/A
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    4.3 / 5.0
    close
    SimpleScore Alliant Credit Union 4.3
    Perks 5
    Credit Impact 5
    Customer Satisfaction N/A
    Product Variety 3
    Fees 4

    Alliant offers a 15-year mortgage with a low down payment and interest rate.

    Alliant Credit Union has a low minimum down payment option of $0 for first time home buyers and 5% for repeat home buyers. There’s no application fees and you can get free customized quotes online quickly. Alliant Home Rewards offers a cash back rebate up to $6,500 if you use the credit union to get help with finding a home — Alliant will choose your local real estate agent and loan officer to complete your homebuying journey.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a 30-year conventional loan. For specific information on 15-year mortgage loans, please visit the lender site.

    Best for people with bad credit – New American Funding

    New American Funding is great for those with bad credit, but you might have to do some digging to get a list of its mortgage fees.

    J.D. Power Rating
    N/A
    Min. Credit
    500
    Min. Down Payment
    3%
    SimpleScore
    4 / 5.0
    close
    SimpleScore New American Funding 4
    Perks 4
    Credit Impact 4
    Customer Satisfaction N/A
    Product Variety 5
    Fees 3

    Best for people with bad credit since an actual person — not a computer — will review your application.

    New American Funding is the best option if you have bad credit because it uses a manual underwriting process. Instead of relying on a software program to approve or deny you a mortgage loan, there will be an actual person making that decision. That gives anyone with poor credit a higher chance of getting approved.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a 30-year conventional loan. For specific information on 15-year mortgage loans, please visit the lender site.

    Best for in-person lending – Bank of America

    Bank of America is the Swiss army knife all personal finance needs, including finding the key to financing your new home.

    J.D. Power Rating
    3/5
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.8 / 5.0
    close
    SimpleScore Bank of America 3.8
    Perks 5
    Credit Impact 3
    Customer Satisfaction 3
    Product Variety 4
    Fees 4

    Bank of America likely has a branch near you so you can speak face-to-face with someone about your mortgage.

    Bank of America is the best if you want to speak to a loan officer in person and are already a customer with the banking fiant. It has over 5,000 branches across the United States, making it easy to find one near you. It also offers some perks for existing customers of their personal checking accounts. You could qualify for a $200 to $600 discount. Plus, if you submit an application online and are already a customer, the application can prefill a lot of your information.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a 30-year conventional loan. For specific information on 15-year mortgage loans, please visit the lender site.

    Best for online loans – Rocket Mortgage

    Go completely digital with Rocket Mortgage — the leader in online home loans, Rocket Mortgage can help find your home without you leaving your home.

    J.D. Power Rating
    5/5
    Min. Credit
    620
    Min. Down Payment
    3%
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore Rocket Mortgage 3.4
    Perks 4
    Credit Impact 4
    Customer Satisfaction 5
    Product Variety 3
    Fees 1

    Rocket Mortgage is the best mortgage lender choice if you want the convenience of completing the process all online.

    Rocket Mortgage is the best for online lending. If you want to complete the entire mortgage application process online, Rocket Mortgage is for you. It also offers the option of speaking to a loan officer instead of doing it all online. It has been the highest in customer satisfaction for primary mortgage origination from J.D. Power for multiple years. Whether you just want to know what you can afford, are looking for an approval letter or need to apply for a mortgage, it’s easy to do all of this online.

    Note: The lender information (Min. Credit Score and Min Down Payment) included refers to a 30-year conventional loan. For specific information on 15-year mortgage loans, please visit the lender site.

    What is a 15-Year Fixed Mortgage?

    A 15-year fixed-rate mortgage is a type of home loan that breaks up your repayments over 15 years and has the same interest rate and monthly payment over the whole term. This type of mortgage is a good alternative to 30-year loans because it offers lower interest rates.

    If you go with a 15-year mortgage, you’ll pay less interest over the life of the loan and build equity faster, but you’ll also have a higher monthly payment. That’s probably why 30-year fixed mortgages are still the most common type of home loan.

    Still, if you can afford to pay a little more for housing each month, getting a 15-year mortgage is often a sound financial decision, and a safer bet than a 10-year mortgage, which has even higher monthly payments.

    How does 15-year mortgages work?

    A 15-year mortgage is worth it if you can afford the higher monthly payments. Traditionally, lenders offer 30-year mortgage loans with 360 monthly payments. This was traditional because after you bought a home in your 20s or 30s, you’d have it paid off by the time you reached your 50s or 60s, just in time to retire.

    A 15-year mortgage instead has 180 total monthly payments. It provides a lower interest rate and lower interest costs over time. You need a good income to afford a 15-year mortgage, because the monthly payments will be nearly double that of a standard 30-year loan.

    These 15-year mortgages work just like other home loans. The only difference is the length of the loan. You will have your house paid off in 15 years (or less if you pay more than the amount due each month). You’ll need to choose a lender, find a local real estate agent, shop for a home, pick the home you want, and then fill out an application for your loan.

    You can choose between a fixed rate 15-year mortgage or a 5/1 ARM with a variable rate. A fixed rate is usually better because your interest rate will stay the same no matter what. An adjustable rate can change, and could bring your mortgage payment up, bringing an unwelcome surprise. The best one to go with is the fixed rate term, especially while interest rates are low.

    Historical trends on 15-year mortgage rates

    According to Freddie Mac, 15-year mortgage trends were lower in May of 2020 than they were in the previous two years. The current monthly average on a fixed rate 15-year mortgage is 2.69%. That’s down almost a full 1% from May 2019. This could be due to COVID-19 slowing down anyone looking to buy a new house. Since the pandemic, many states and countries have been in a lockdown and only going out when absolutely necessary.

    The pandemic has put millions of people out of work. Not many people are looking to buy a new home in this uncertain time. Furthermore, stay-at-home orders have made it difficult for buyers and sellers. Sellers can’t stage and show houses, buyers can’t go look at houses, and buyers are hesitant to apply for a mortgage without job stability, according to The Poynter Institute.

    Cost over time

    A 15-year mortgage loan means a lower cost in interest, which means it will cost you less over time. The average interest rate on a 15-year mortgage loan is 2.86%, according to Bankrate. That’s over 1% less than the 3.41% interest rate on a 30-year mortgage. You can save thousands over time with that lower rate.

    So, let’s say you get a $350,000 home loan with a 30-year mortgage and 3.41% interest. You’re going to end up paying a total of $559,485 on that loan. That’s $209,485 in interest alone. Let’s take that same $350,000 home and finance it with a 15-year loan at 2.86% interest. You’ll pay a total of $430,837, making your total interest cost $80,837. That’s a savings of $128,648 over the term of the loan.

    30-year vs. 15-year mortgage

    A 30-year loan has more payments (360 to be exact), and that gives you a lower monthly payment but higher interest rates. A 15-year loan has less payments (180), and that gives you a higher monthly payment but a lower interest rate. With the 15-year term you’ll pay your loan off in half the time and build your home equity faster.

    A 30-year mortgage is the better choice if you simply cannot afford the higher monthly payments. Try to pay more on this loan when you can to lower your overall interest costs. You can also get a better, more expensive home with the 30-year mortgage than you could with a 15-year mortgage. Which one you choose depends on your financial situation.

    Pros and cons of a 15-year mortgage

    ProsCons
    • Pay off loan faster
    • Pay less interest over time
    • Lower interest rates
    • Larger home affordability
    • Higher monthly payment
    • Less home affordability
    • Smaller monthly budget

    How to choose the best 15-year mortgage for you

    • Figure out your total home buying budget, which depends on your income, expenses, and debts. Your monthly payment should be 25% or less of your monthly income.
    • Find a low interest rate. The lower, the better, but weigh all of the lender’s details. You might find that lender option one has the lowest interest rate but doesn’t have something else you want.
    • Calculate how much of a down payment you can make. The bigger your down payment is, the smaller your total loan will be, saving you money in the long run.
    • Look for a lender that has a low or zero minimum required down payment if you don’t have much saved.
    • Scope out mortgage loan fees. Ask the loan officer for a list of all fees if necessary.
    • Figure out what your total closing costs will be so you can be prepared. You can estimate them now and start saving.
    • Check the lender’s J.D. Power score. You’ll want a lender with excellent customer service. Note how you can contact them (phone, email, text, or in person) and when you can contact them.

    Mortgage FAQs

    The current average interest rate on a 15-year mortgage is 2.69%, according to Freddie Mac.

    According to FICO, if you have a low credit score (620–639), your 15-year mortgage payments for a $200,000 home will be (on average) $1,527 per month with a 4.468% interest rate. If you have a high credit score (760–850), your 15-year mortgage payments for that same $200,000 home will be $1,370 with a 2.879% interest. That’s a savings of $28,289 in interest alone.

    That depends on the minimum required down payment from the lender and how much you can pay. It’s best to save as much as you can for a down payment. It will decrease your total loan, saving you money on interest charges over time

    Buying a home is an incredibly personal purchase. It all depends on your financial situation. It’s a good time to take out a 15-year mortgage if you have good credit and high income.

    We welcome your feedback on this article and would love to hear about your experience with the mortgage lenders we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    The impact of COVID-19 on your mortgage rates.

    The real estate market is changing. To stimulate the economy, the Federal Reserve made two mortgage rate cuts in March and another one in February, setting a federal fund rate to a range of 0% to 0.25%.

    Today rates on fixed-rate mortgages are at a record low. People shopping for new homes should consider that although lower rates boost mortgage financing, the supply is limited and hard to lock down. Those who can reach a deal and lock in the current interest rate can look into lender’s options for seven-day locks, which can reduce borrowing costs.

    Lenders and banks like Bank of America and Navy Federal Credit Union are also offering hardship forbearance to borrowers facing financial troubles due to COVID-19. And although forbearance isn’t forgiveness, the temporary basis has helped close to 4 million American borrowers as of May.

    Methodology

    SimpleScore

    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore

    We break down each of these five factors and their rating criteria for our review of the best mortgage companies.

    Why do some brands have different SimpleScores on different pages?

    Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores because they offer more than one financial solution — like home loans, auto loans, personal loans and more.

    For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of a brand’s services and how it compares to competitors’ services.

    Perks

    Mortgage lending companies that provide more perks receive a higher score from us.

    Hard/Soft credit checks

    We know that credit checks affect your score –– that’s why we favor companies that offer soft credit checks or hard credit checks when you want to see your pre-approval rates.

    Customer satisfaction

    We use the J.D. Power 2019 Mortgage Origination Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)

    Product variety

    Mortgage lenders that offer more products for their home loans are given higher scores.

    Fees

    Fees can add up fast. Companies that don’t require as many fees for your home loan receive a higher score with us.

    Nicky LeMarco

    Contributing Writer

    Nicky LaMarco is a business and finance writer who has written for Interest, Bizfluent and Houston Chronicles.