15 Year Fixed

What is it?

One of the main benefits of a 15-year fixed loan is that you can save on interest. Choosing a 15-year fixed loan is best for people who are in search of saving by paying off their loan sooner rather than later. They work by having the interest rate locked in for the life of the loan, meaning you don’t have to worry about rising rates. A 15-year fixed loan also allows you the flexibility to buy a home with as little as 3% down.

What You Need


A minimum 3% down payment. (You’ll have to pay primary mortgage insurance (PMI) if your down payment is less than 20%.


A minimum FICO® Score of 620.


A debt-to-income ratio (DTI) of no more than 50%. Estimate your DTI by adding your monthly debt payments (such as credit card and car payments) and dividing thetotal by your monthly income before taxes.


Money to cover closing costs, which are about 2% – 6% of the purchase price.

What are the benefits and cons 
of a 15-year fixed mortgage?

Below is a chart with benefits and cons of a 15-year fixed mortgage. This can be a tool to help you decide whether a 15- year fixed mortgage is right for you.


Pay off your mortgage quicker.

You will make fewer payments (180) than with a 30-year mortgage (360). Plus, interest and principal rates never rise.

Usually lower interest rates.

15-year fixed mortgages tend to have lower rates than other options.

Build equity faster.

Having a 15-year fixed mortgage allows you to build equity faster since you are paying
your principal in half the time than a 30-year mortgage.


Monthly Payments will be higher.

This is usually the biggest challenge since it means having less money for other expenses.

May mean having to make sacrifices for other investments.

Wanting to pay down your mortgage faster may mean not putting aside savings for retirement.

Lower mortgage amount.

Since monthly payments tend to be higher,lenders make sure you do not max out with just monthly mortgage payments. Lenders most likely will not be willing to lend more than what you can pay back.