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15 Year Mortgage Rate Charts | Mortgage Rates, Mortgage News & Strategy: The Mortgage Reports

By on March 9, 2021 0

15-year mortgage rate chart shows historic lows

The 15-year mortgage rate charts have a great story to tell.

They show a way to reduce interest charges by tens of thousands of dollars over the life of the loan.

But while 15-year financing offers significant benefits, it’s often an afterthought.

Many homebuyers never really investigate a 15-year loan because they assume the monthly payments will be too high.

But with mortgage rates at their lowest in three years, buyers and refinancers can now afford 15-year mortgages that previously couldn’t.

Find a low 15-year mortgage rate today (August 22, 2021)


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Average mortgage rates over 15 years since 1992

Year Average rate over 15 years Year Average rate over 15 years Year Average rate over 15 years
1990 n / A 2000 7.72% 2010 4.10%
1991 n / A 2001 6.50% 2011 3.68%
1992 7.96% 2002 5.98% 2012 2.93%
1993 6.83% 2003 5.17% 2013 3.11%
1994 7.86% 2004 5.21% 2014 3.29%
1995 7.48% 2005 5.42% 2015 3.09%
1996 7.32% 2006 6.07% 2016 2.93%
1997 7.13% 2007 6.03% 2017 3.28%
1998 6.59% 2008 5.62% 2018 4.00%
1999 7.06% 2009 4.57% 2019 3.39%

15-year mortgage rates vs 30-year mortgage rates

Freddie Mac has been recording 30-year mortgage rates since 1971 and 15-year mortgage rates since 1992. And during that time, the average 15-year fixed rate has consistently been significantly lower than its 30-year counterpart.

Graph of 15-year vs. 30-year mortgage rates since 1991 - The Mortgage Reports

Over the past 10 years, 15-year rates have been about 0.7% lower than 30-year rates on average. That’s a huge savings margin for homeowners.

Year 30-year mortgage rate 15-year mortgage rate Difference
2010 4.10% 4.69% -0.59%
2011 3.68% 4.45% -0.77%
2012 2.93% 3.66% -0.73%
2013 3.11% 3.98% -0.87%
2014 3.29% 4.17% -0.88%
2015 3.09% 3.85% -0.76%
2016 2.93% 3.65% -0.72%
2017 3.28% 3.99% -0.71%
2018 4.00% 4.54% -0.54%
2019 3.39% 3.94% -0.55%

Find and Lock in a Low 15-Year Mortgage Rate (August 22, 2021)

There are two reasons why 15-year mortgages have lower interest costs than 30-year financing.

First, the loan term is shorter. There is less interest owed to the lender over time because the loan is paid off faster.

Second, 15-year mortgages have a significantly lower interest rate rates. A lower rate means that you are paying less interest compared to your overall loan amount.

When you combine a shorter term with a lower rate, the interest on a 15-year mortgage is typically tens of thousands of dollars less than a 30-year mortgage of the same size.

Why are 15-year mortgage rates lower than 30-year rates?

Lenders offer lower rates for 15-year financing because shorter terms mean less risk.

Sometimes borrowers cannot make their payments because they lose their job, have a medical emergency, or suffer some other financial setback. There is half the risk of such events occurring over 15 years compared to 30.

In addition, debts are paid off faster, so the lender has less unpaid cash. If something goes wrong, the lender has less at stake.

So overall, 15-year financing is a better deal for mortgage lenders. But it’s a bit riskier decision for mortgage borrowers.

Mortgage payments over 15 years or over 30 years

We say 15-year mortgages are “riskier” for borrowers than 30-year mortgages because the monthly payments are higher.

How is this true when the interest is so much lower? This is because you pay off the loan in half the time. So, despite the drop in interest, you pay off much more of the principal (loan balance) each month.

Take a look at the example of a 15-year mortgage versus a 30-year mortgage on the same house:

30 year fixed rate mortgage 15 year fixed rate mortgage
Loan size $ 250,000 $ 250,000
Interest rate 3.6% 3.0%
Monthly payment of principal and interest $ 1,130 $ 1,720
Total interest paid over the term of the loan $ 159,100 $ 60,800
Total cost of the loan $ 409,100 $ 310,800

When rates go down, mortgage payments go down too. 15-year mortgages are therefore more affordable at today’s historically low rates than they have been in recent history.

But, if you don’t have a lot of budget flexibility, a 30-year mortgage probably makes more sense.

With a 15-year loan, your mortgage payment will take up more of your monthly budget. So if something suddenly changes – say, you lose your job or have a large medical bill – the mortgage could quickly become unaffordable. A 30-year payment is lower and gives you a little more flexibility.

Of course, the right decision depends on your budget and the rate you qualify for.

Check your loan options and rates here (Aug 22, 2021)

15 Year Fixed Rate Mortgage (FRM) vs. 5 Year Adjustable Rate Mortgage (ARM)

When borrowers are looking for mortgages, they have many options. They may consider 30-year mortgages versus 15-year financing, as well as Fixed Rate Mortgages (FRM) versus Variable Rate Mortgages (ARM).

  • Fixed rate mortgages (FRM) lock in your interest rate for the life of the loan. Your mortgage rate and payments won’t change unless you refinance
  • Variable Rate Mortgages (ARM) lock in your rate for the first 5, 7 or 10 years. After that, your rate may go up and down as the market moves. When your rate changes, your payment also changes

If we only look at rates, ARMs will generally have much lower rates than 30-year financings, and slightly higher rates than 15-year financings.

In early 2020, 30-year mortgages were valued at 3.72%, 15-year financing was available at 3.16%, and 5/1 ARMs were listed at 3.46%.

The big difference is that with an ARM, your rate could drop after the initial fixed period. But it could also go higher. So there is no guarantee that you will save money.

ARM and risk

The rates that change are not the same as the constant rates. If rates can change, it means they can go up or down. There is more risk for the borrower. There could be a situation where the rates go up, the monthly payments go up and the borrower’s income goes down. This could create difficult circumstances for many households.

While mortgage rates have generally fallen since the early 1980s, they could go up. It is this uncertainty that explains why ARMs may have competitive start-up rates but are generally not favored by borrowers. ARMs accounted for just 5.5% of all mortgage arrangements in December 2019, according to Ellie Mae.

Which financial option is right for you? There is no one-size-fits-all answer, everyone has different needs and preferences. For more information, talk to loan officers and see what type of financing best meets your needs.

Lock in a low 15-year rate for as long as they last

At the time of writing (early February 2020), rates are about the lowest they’ve been in three years. And 15-year rates are even lower than 30-year mortgages. So now is the perfect time to lock one down.

If you think a 15-year mortgage is right for you, explore your options today. Low rates might not last long.

Check your new rate (August 22, 2021)