How to compare 15-year mortgage rates and cut interest costs

If you can handle the larger monthly payment, a 15-year mortgage — whether you choose one for a new home loan or refinance into it — can lead to major interest savings over the full life of the loan.

Like 30-year mortgages, 15-year rates have moved unevenly in recent months and have risen since the spring. Even so, they are usually lower than longer-term loan rates, so it may be worth considering the shorter option if it has not been on your radar.

Because mortgage rates can change daily and sometimes even within hours, it pays to watch trends closely and compare offers from several lenders before you commit.

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What a 15-year fixed-rate mortgage means

A 15-year fixed-rate mortgage is a home loan designed to be paid off in 15 years, or 180 months, with an interest rate that stays the same for the entire term. It is much less common than the 30-year mortgage, which accounts for about 90% of all mortgages according to Freddie Mac data, but it can still be a strong choice for buyers and homeowners in the right situation.

It is especially appealing to borrowers who want to eliminate their mortgage faster than they would with a standard 30-year loan. The shorter term, combined with rates that are usually lower, can produce substantial interest savings over time.

Another benefit is payment stability. Because the loan has a fixed rate, your monthly principal and interest payment stays unchanged for the life of the loan, making budgeting more predictable even if market rates move around.

The drawback is the faster payoff schedule. Spreading payments over only 15 years means the monthly bill is higher than it would be on a 30-year loan. That can be difficult for some buyers, but it may work well if you can manage the payment and want to build equity more quickly while paying less interest overall.

15-year vs. 30-year fixed-rate mortgages

If you are deciding between a 15-year and 30-year fixed-rate mortgage, these are the main differences to keep in mind:

Rates on 15-year loans are generally below those on 30-year mortgages because the shorter repayment period costs lenders less and carries less risk. Another advantage is that equity builds more quickly, which can be useful later if you want to borrow against your home through a home equity loan, a home equity line of credit or a cash-out refinance.

The trade-off remains the same: the higher monthly payment may be too much for some borrowers.

How much a 15-year mortgage can save

A 15-year fixed-rate mortgage can save a large amount of interest compared with a 30-year loan, but what does that mean in practical terms?

Using CNN’s mortgage calculator, here is one example for a $325,000 loan at 6.5% on a 30-year term and 6% on a 15-year term:

• 30-year term total interest costs: Approximately $414,520
• 15-year term total interest costs: Approximately $168,656
• Total interest savings with a 15-year term: Approximately $245,864

How 15-year fixed mortgage rates are determined

Several forces affect the rate you may receive on a 15-year fixed mortgage. Broader economic conditions matter, but so do your personal finances, the lender you choose and the type of loan you apply for.

These are some of the biggest influences on mortgage rates and the offers lenders make:

Economic factors

• 10-year Treasury yield: Thirty-year mortgage rates often move in line with the 10-year Treasury yield because many borrowers refinance or move within seven to 10 years. Lenders typically add a spread of about 1.5 to 2 percentage points. For example, if the 10-year Treasury is 4.5%, the average 30-year mortgage rate might land between 6% and 6.5%.

• Federal Reserve policy: The Fed does not directly set mortgage rates, but its rate decisions and even its signals about future policy can influence them.
• Inflation: Higher inflation often pushes interest rates higher across the economy, including mortgage rates.
• Housing and lending demand: Strong demand for loans or a limited supply of lending capital can lift mortgage rates.
• Global events: Wars, financial crises, trade disputes, natural disasters and pandemics can create market swings that affect mortgage rates.

Your financial profile

• Credit score: A higher score generally helps you qualify for better rates.
• Down payment: A larger down payment lowers lender risk and can improve the rate you are offered.
• Loan-to-value ratio (LTV): LTV compares your loan amount with the home’s value. Many lenders prefer an LTV of 80% or less. In general, the lower your LTV, the better your odds of getting a lower rate because you are borrowing less relative to the home’s value.
• Loan type and term: Rates vary by program and structure. For example, 30-year fixed mortgages usually carry higher rates than 15-year and other shorter-term loans, though they offer lower monthly payments. Choosing a fixed-rate or adjustable-rate mortgage can also affect the rate you receive.

Pros and cons of a 15-year fixed-rate mortgage

A 15-year mortgage can be an excellent fit for some borrowers and a poor fit for others. Much depends on your finances, goals and long-term plans.

Pros

• Lower interest rate
• Pay less in interest over the full loan term
• Build equity faster
• Own your home outright sooner

Cons

• Usually requires higher monthly payments
• Higher payments may reduce your home-buying budget
• Harder to qualify for
• Less financial flexibility may limit saving or investing

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Ways to get a better 15-year fixed mortgage rate

Broader forces such as the bond market, inflation, Federal Reserve policy and global events help drive mortgage rates, and those are outside your control. Still, there are steps you can take to improve your chances of getting a competitive 15-year fixed mortgage rate. By strengthening the factors lenders use to price loans, you may qualify for better terms and a lower rate.

Here are some strategies that may help:

• Improve your credit score: A score in the mid-700s can help you access the most competitive rates, potentially saving thousands in interest over the life of the loan.
• Compare offers from multiple lenders: Getting quotes from several lenders can improve your chances of finding a strong rate. If you complete your rate shopping within a 45-day window, the credit checks generally will not hurt your score beyond the first inquiry.
• Save for a larger down payment: Putting more money down reduces how much you need to borrow and may help you qualify for a lower rate. Lenders often see a borrower who puts 20% down as less risky than one who puts down 10%.
• Keep your debt-to-income ratio low: Your DTI shows how much of your gross monthly income goes toward recurring debts, including credit cards, car loans, your mortgage and other obligations. A 40% DTI means 40% of your income goes to debt payments. Most lenders prefer a total DTI of 36% or less, though some allow up to 43% or more depending on the loan. Lower DTI can improve your chances of approval and better pricing.
• Compare loan programs: FHA, VA and USDA loans, which are backed by the federal government, often come with lower rates than conventional loans funded by private lenders. If you qualify, one of these options could lower your borrowing costs.
• Use mortgage discount points: Discount points are an upfront fee paid at closing to reduce your rate. Usually, one point costs 1% of the loan amount and may lower your rate by about 0.125 to 0.25 percentage points. For example, on a $250,000 loan at 6.25%, paying one point, or $2,500, could potentially bring the rate down to 6.0%.
• Lock your rate at the right time: If a lender offers a rate you like, you may be able to lock it for a set period, often 30, 45 or 60 days, sometimes longer. The lock is generally intended to last through closing. Some lenders offer locks at no cost, while others charge a fee or slightly raise the rate to cover the expense.

Who should consider a 15-year fixed-rate mortgage?

A 15-year mortgage offers clear advantages, but it is best suited to certain borrowers. If you are choosing between a 15-year and a 30-year mortgage, these points may help you decide which one fits your finances and homeownership goals.

A 15-year mortgage may be a good fit if:

• Your career and income are stable or rising
• Paying off your home quickly is important to you
• You are refinancing to get a lower rate or better terms
• You have a solid emergency fund
• You are buying a home that fits comfortably within your budget
• Retirement is approaching

A 30-year fixed-rate mortgage may be better if:

• You cannot comfortably handle the higher monthly payment
• You do not have much emergency savings
• You want more flexibility to save, invest or pursue other financial goals
• You need more purchasing power to afford a more expensive home
• You are a first-time home buyer

How mortgage lenders and rates are evaluated

According to CNN Underscored’s mortgages and loans methodology, mortgage lenders are reviewed using a 100-point scoring system. Based on their scores in each category, lenders are placed into weighted tiers.

Our weighted lender tiers

• Exceptional: 95 and above
• Highly recommended: 86 to 94
• Recommended: 80 to 85
• Limited appeal: 75 to 79
• Proceed with caution: 74 and below

How rates compare with borrower access

A low rate matters, but the lowest advertised rates usually go to borrowers with the strongest finances. That is why it is important to look at both the competitiveness of a lender’s rates and how accessible its loan products are to a wide range of borrowers.

Looking beyond rates

We also consider how easy lenders are to reach through customer support, the quality of their digital experience and how quickly borrowers can typically close. We assess whether they offer realistic rate or fee discounts that can reduce costs as well.

Frequently asked questions

Whether you can refinance from a 30-year mortgage into a 15-year mortgage depends on your finances and how much home equity you have. Refinancing replaces your current mortgage balance with a new loan. If lenders believe you can manage the higher monthly payment that comes with the shorter term, and you meet their credit, income and equity requirements, your odds of qualifying improve.

The credit score you need for a 15-year mortgage depends on the lender, the loan type and other factors such as your down payment. In general, you usually need at least a 620 credit score to qualify for a conventional mortgage. FHA loans may accept scores as low as 500 if you put down at least 10%. Jumbo loans often require a score of 700 or higher. Borrowers with scores in the mid-700s and above generally have the best chance of getting the most competitive rates.

Yes, you can pay off a 30-year mortgage in 15 years by making extra payments toward principal. But that requires consistently paying much more than the required monthly amount. For example, on a $250,000 mortgage at 6.5%, you would need to add about $650 per month toward principal to pay it off in 15 years instead of 30.

If that amount is too high, smaller extra principal payments can still shorten the loan term and save a meaningful amount of interest. For instance, adding just $65 a month toward principal could cut about three years off the loan and save more than $41,000 in interest.

Why CNN Underscored can be trusted

CNN Underscored’s Money team follows a clear methodology, independent editorial judgment and a focus on helping readers understand which home loan products are worth considering. Its mortgage coverage is built on analysis of rate trends, lender offerings and borrower needs, with the goal of making a complicated borrowing market easier to navigate.

For this article, CNN Underscored money writer Robin Rothstein drew on her experience covering mortgages, loans and housing to explain 15-year mortgage rates and 15-year fixed-rate mortgages, along with the savings that may be available to borrowers who can manage the higher monthly payments. She regularly covers rate trends, housing market changes and developments affecting homebuyers, refinancers and current homeowners.