Average interest Rate for 15 year MortgageThe average interest rate for a 15-year mortgage is
30%, 4.32%, -0.02. The mortgage lenders prefer candidates who can demonstrate stable employment for at least the last two years. A 15-year loan has a lower average mortgage rate than a 30-year loan.
Which is more sensible from a financial point of view, a 15-year fixed-rate mortgage or a 30-year fixed-rate mortgage? What is the best way to decide which credit method is best for you and your ancestor? And as their name suggests, the key distinction between a 15-year and a 30-year fixed-rate mortgage is the term. When you make your periodic credit repayments every single Monday on schedule, you repay a 15-year fixed-rate mortgage in 15 years.
You' re paying off a 30-year fixed-rate mortgage in 30 minutes. A 15-year mortgage has a lower average interest rate than a 30-year one. Freddie Mac said the average interest rate for a 15-year fixed-rate mortgage was 3.38 per cent in January 2018. In the same time frame, the average interest rate of a 30-year fixed-rate mortgage was 3.95 per cent.
These two prices are slightly below the level of the previous year and continue to be historic attractions. You will find, however, that the rate for the 15-year term is lower than the 30-year term. Meaning that a 15-year fixed-rate mortgage is the best fiscal option? With a 15-year mortgage, the key advantage is that you will be paying less interest during the term of the mortgage.
If you repay your mortgage, this can help you saving tens of millions of dollars. If you take out a $200,000 30-year fixed-rate mortgage at a rate of 3.95 per cent, for example, you will be paying $144,666 in interest over the term of your mortgage. When you take out the same mortgage at the same interest rate, but for a mere 15 years, you are paying only $65,386 in interest over the term of the mortgage.
That' s a $76,280 savings if you took out the 15-year fixed-rate mortgage. This does not necessarily mean that the 15-year term is the best option for you and your ancestor. Though a 15-year mortgage comes with a lower interest rate, your initial installment for such a mortgage will be higher than for a 30-year mortgage.
With a 30-year term credit, the montly repayments are spread over a longer term. This 15-year $200,000 fixed-rate mortgage at 3.38 per cent would cost you $1,418 a mortgage a month. Instead, if you took out a $200,000 30-year mortgage at a 3.95 per cent rate with a guaranteed interest rate of $200,000, you would be paying $949 per month. What's more, you'd be paying $949 per year.
Could you conveniently pay the month-end fee associated with a 15-year fixed-rate mortgage? Assuming you do, taking out one of these mortgages might be a better option because you will be spending less on interest. But if you can't manage to pay the 15-year mortgage in your household bill, a 30-year fixed-rate mortgage might be a better one.
To find out whether a 15-year or 30-year mortgage is right for you, please get in touch with one of our mortgage managers today.