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15-Year Mortgage Rates at Record Lows

15-Year fixed-rate Mortgage Rates at Record Lows

This past week the average mortgage rate for 15-year fixed-rate mortgages dropped below 2.4 percent, just hovering above it’s all-time record low. If you’ve been thinking about refinancing for a lower mortgage payment, paying off your loan faster or saving thousands in mortgage interest, this quick article could help you decide.

How to Know if a 15-Year Fixed-Rate Mortgage is Your Next Move

Your mortgage is probably one of your biggest financial commitments. For a lot of homeowners, the home loan you started with isn’t always the perfect mortgage for the long-term. If you’ve got an adjustable mortgage, switching to a fixed-rate mortgage can add a sense of security.  Maybe you’re income is higher now and you want to payoff your home faster. Or perhaps the high monthly interest you’re paying every month is keeping you awake at night.

If you’re considering refinancing your mortgage, a 15-year fixed-rate mortgage could offer the advantages you’re looking for.

15-Year Fixed-Rate Mortgages Explained

Fixed-rate mortgages still remain one of the most popular home loans and it’s not hard to understand why. Both 30-year and 15-year fixed-rate mortgages have a lot in common.

A 15-year mortgage offers a fixed rate for the life of the loan, a predictable monthly mortgage payment that won’t change and a clear payoff date. There are a few added benefits. For one, you’ll payoff your home in half the time and save thousands in interest. But paying off your mortgage that fast might not be a high priority.

Let’s look at some of the main benefits and drawbacks.

Benefits of a 15-year Mortgage Refinance

  • Fixed rate, fixed payments, secure payoff date
  • Typically lower interest rate than 30-year fixed-rate mortgage
  • A fast pay down schedule
  • Save thousands in interest over the life of the loan
  • Build equity faster while you pay down principal faster
  • Possibly a lower monthly payment

Paying down the principal and building your home equity quickly could mean access to cash-out refinancing or a home equity line of credit down the road. By paying down your house faster you could take advantage of other financial opportunities sooner.

15-Year Mortgages: Breaking the High-Payment Myth

Did you know that your new monthly payment with a 15-year fixed-rate mortgage might be close to your current mortgage payment or even lower? Today’s lower rates could result in an overall loan that has better terms, a faster payoff and even a lower payment.

If you’ve been paying down your home mortgage for a while, your mortgage balance has probably dropped since your very first mortgage payment.  Now, with a lower principal balance plus the equity you’ve built, you’re in a different situation. You might have a home with a higher value, higher equity, and a lower principal balance.

Combine super low mortgage rates into the equation and you could be looking at a lower monthly payment and faster payoff.

When a 15-year Refinance Might Not Be A Good Fit

Paying off your mortgage fast isn’t always the best financial decision. Especially if it limits your ability to save for emergencies or build long-term financial stability.  It’s always a good idea to leave room for life changes that are beyond our control.

An unexpected job loss or health crisis could cause extra financial pressure, especially if all your resources are going toward your mortgage. If you’re unsure about your financial future, locking into a 15-year fixed rate loan could put you at risk later if you need to refinance and interest rates have risen.

Take time to look at your monthly cash flow, current and prospective investments, retirement and emergency expenses. If a 15-year fixed-rate mortgage payment makes sense in the bigger picture, you’ll be able to payoff your home faster and save thousands in interest over the life of the loan.

What’s Next

Working with an experienced mortgage broker can really help when you’re considering refinancing. You’ll be able to ask questions unique to your situation and work through different scenarios with real numbers. If you’re thinking about refinancing and want to take advantage of today’s low mortgage rates, give us a call. We can help.