The average 15-year fixed mortgage rate nationwide is 4.86% and the 15-year jumbo mortgage rate is 4.82%, as of August 11, 2022. These rates are not the teaser rates you may see advertised but, based on our methodology, should more accurately represent what customers can expect to get depending on their qualifications.
You can learn more about what makes our rates different in the Methodology section of this page.
- A 15-year mortgage means a higher monthly payment.
- It is paid off in half the time, resulting in thousands of dollars of savings in interest.
- The rates for 15-year mortgages are generally a bit lower than for 30-year mortgages.
15-Year Mortgage vs. 30-Year Mortgage
Just because it’s common for homeowners to take out a 30-year mortgage doesn’t mean you need to. Borrowers who score the best 15-year mortgage rates will be able to save tens of thousands of dollars in interest over the lifetime of the loans. While it does come with a higher monthly payment, those who plan properly will be able to take advantage of lower interest rates and will build home equity much faster.
Even so, you’ll want to make sure your financial situation is rock-solid enough to afford the large payments. To help you with your decision, we’ve compiled a list of the best 15-year mortgage rates, as well as information such as the pros and cons of choosing this type of home loan.
Who Should Consider a 15-Year Mortgage
Homeowners who want to save significantly on a home loan and can afford to pay the higher monthly mortgage payments are best suited for 15-year mortgages.
The loans tend to have lower interest rates—government-supported agencies like Fannie Mae and Freddie Mac tend to impose loan-level price adjustments, which drive up the costs of 30-year mortgages.
Borrowers considering 15-year mortgages need to consider whether they can afford the monthly payments, as they will be higher compared to a 30-year or 20-year mortgage.
The Rates for 15-Year Mortgages
The best rate that you can get will depend on your credit profile, how much money you're putting down, and other financial considerations, given prevailing conditions for rates.
For example, if the average rate in your area currently is 7%, you may get a mortgage at 6.75% or 7.3% depending on your creditworthiness and other financial factors.
15-Year Rates Are Lower Than 30-Year Rates
Rates for mortgages are in part based on bond prices in the mortgage-backed securities market. Investors in bonds want to park their cash in a low-risk investment that offers a decent rate of return that will keep up with the rate of inflation.
Since inflation rates and other risk factors tend to go up over time, longer-term loans will have higher interest rates than shorter-term ones. Investors can't accurately project inflation rates and other risk factors far in advance.
Freddie Mac and Fannie Mae, both government-supported agencies, also impose price adjustments for loan levels, driving up the costs of 30-year mortgages. Many 15-year mortgages don’t have these additional fees, which is reflected in a lower rate.
Today's 15-Year Mortgage Rates
|Jumbo 15-Year Fixed||4.82%||4.91%|
Today's Rates for All Mortgage Loan Types
|FHA 30-Year Fixed||5.33%||5.80%|
|VA 30-Year Fixed||5.52%||6.05%|
|Jumbo 30-Year Fixed||4.94%||5.03%|
|Jumbo 15-Year Fixed||4.82%||4.91%|
|Jumbo 7/6 ARM||4.62%||4.80%|
|Jumbo 5/6 ARM||4.61%||4.69%|
What Is a 15-Year Mortgage?
A 15-year mortgage is a fixed-rate loan to pay for a home purchase. The monthly payment, which includes principal and interest, remains the same throughout the lifetime of the mortgage.
It is paid off in half the time of a traditional 30-year mortgage. The abbreviated time span and the higher monthly payments result in a savings of thousands of dollars in interest over the life of the loan.
Does the Federal Reserve Decide Mortgage Rates?
The Federal Reserve does not decide mortgage rates but it certainly influences them.
The Fed decides the federal lending rates that it charges banks to borrow money from the government short-term.
Here's how it works: The Federal Reserve (more specifically, the Federal Open Market Committee) determines the current federal funds rates with the goal of keeping the economy stable. The banks in turn reset their own adjustable and short-term interest rates.
(Banks borrow money from the Federal Reserve, and borrow and lend it among themselves, in a constant flow that maintains the equilibrium of the system.)
When these inter-bank rates go up, it becomes more expensive for financial institutions to borrow from other financial institutions. They adjust their loan rates, including mortgage rates, to cover the extra expenses.
There are other factors at play in the precise rate that an individual homebuyer will be offered. Those factors include the borrower’s assets, liabilities, and credit rating.
What Are the Differences Between a 15-Year and 30-Year Mortgage?
The biggest difference between the two is the length of time for repayment. A 30-year mortgage will take 30 years or 360 monthly payments. The 15-year term will take half the time, and the borrower will end up paying less in interest over the years.
Since a 30-year mortgage spreads out your monthly payments over a longer period of time, the monthly payments will be lower. You'll also be paying interest on the loan for twice the time. You also may pay a slightly higher interest rate.
Are Interest Rate and APR the Same?
Interest rate and APR are not the same.
The interest rate is the amount you'll pay to borrow the money, stated as a percentage of the loan amount.
The APR is the interest rate plus the additional fees that will be charged for the mortgage. The costs can include application fees, broker fees, discount points, and closing costs. It also will factor in any rebates you get back. The APR is also expressed as a percentage.
It’s because of these additional costs that the APR is greater than the interest rate. There are some exceptions, such as when a lender provides a rebate for a portion of the interest charged.
When Is a 15-Year Mortgage a Smart Option?
A 15-year mortgage is a smart option for borrowers who want to save money on interest and can afford larger monthly payments without compromising their other financial goals and responsibilities.
For instance, a borrower who can't take out a 15-year mortgage without sacrificing regular contributions to a savings account and a retirement fund should probably stick to a longer-term mortgage. A 20-year term is a happy medium.
For borrowers who have variable or sporadic incomes, a 15-year mortgage makes sense only if there is a realistic plan to make the mortgage payment through the lean periods.
If you have a plan, the savings are worth it. Let’s say you have a $300,000 mortgage, and the rate is 4.25% for a 30-year term, compared to 4.00% for a 15-year term. By the end of the 30-year term, you’ll have paid $231,295.08 in interest compared to $99,431.48, a savings difference of $131,863.60. That’s pretty significant.
However, the price savings equates to a much higher monthly payment. The payment for the 30-year mortgage will be $1,475.82, compared to the 15-year loan, which is $2,219.06. That’s why it’s a smart idea to shop around for the lowest rates and compare terms to make sure you can comfortably afford the mortgage.
How We Chose the Best 15-Year Mortgage Rates
In order to assess the best 15-year mortgage rates, we first needed to create a credit profile. This profile included a credit score ranging from 700 to 760 with a property loan-to-value ratio (LTV) of 80%. With this profile, we averaged the lowest rates offered by more than 200 of the nation’s top lenders. As such, these rates are representative of what real consumers will see when shopping for a mortgage.
Keep in mind that mortgage rates may change daily and this data is intended to be for informational purposes only. A person’s personal credit and income profile will be the deciding factors in what loan rates and terms they are able to get. Loan rates do not include amounts for taxes or insurance premiums and individual lender terms will apply.
Freddie Mac. “Mortgage Rates.”
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