Loan Programs
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15 Year Fixed Rate Loan Program
A 15 year fixed rate mortgage generally has a lower interest rate than a 30 or 20 year fixed rate mortgage and will save you a significant amount of interest over the life of a loan. The amount of interest that one pays over the life of their loan is called the "Finance Charge."
Since the term of a 15 year fixed rate mortgage is half that of the the 30 year fixed rate mortgage, the principal component of the monthly payment is much higher on a 15 year fixed rate mortgage. Due to the higher principal payments, you will build equity in your home more quickly with a 15 year fixed mortgage than a 30 year fixed rate mortgage.
Advantages:
- A lower interest rate and shorter term than a 30 year fixed requires you to pay less total interest than a 30 year fixed.
- Loan can be refinanced if rates drop.
Disadvantages:
- Monthly payments are relatively high due to the 15 year amortization.
- Monthly payments do not change if interest rates drop.