When you obtain a 15-year fixed rate loan to buy your home or refinance, you’ll make monthly payments based on the interest rate and principal loan amount.
Because the term of a 15-year mortgage is half that of a traditional 30-year fixed mortgage, you’ll pay significantly less interest over the life of your loan.
However, while the interest rate and total amount of interest you pay will be lower because the 15-year mortgage’s term is shorter, your payments will be higher than they would be with a 30-year fixed rate mortgage.
It’s also important to note that, depending on the size of your down payment (if you’re buying a home) or the amount of equity you have (if you’re refinancing), you may need mortgage insurance.
