How Does a 15 Year Fixed Mortgage Work

While the promise of their lower monthly payments can be tempting, 30 year mortgage terms will cost a homeowner a huge sum in interest payments over the life of the loan. This is because the monthly payments on 30 year mortgages are made over a longer period of time, and because the principal is paid off slower, the interest payments are higher.

As an alternative, you can opt for home purchase and refinance loans for 15 years instead of 30. While the monthly payments on 15 year mortgages are higher than the payments for 30 year mortgages, they offer enormous savings over the life of your loan because less interest is being paid.

Refinancing Your 15 Year Fixed Mortgage

If your income has improved since you first purchased your home and you can afford higher monthly payments in exchange for greater interest savings, then refinancing your 15 Year Fixed mortgage may be a valuable option for you. Refinancing also offers the opportunity to lock in a lower fixed rate if interest rates are low, or if your credit score has improved.


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EDUCASA is a National Home Buying Program and private organization and is not a government agency. EDUCASA is not a lender, has no corporate affiliation with the above preferred lenders and receives no compensation in connection with any mortgage loans.  Only Loan Officers that are EDUCASA Certified Program Specialist with our preferred lenders are eligible to participate in our preferred lender program.  EDUCASA does not sell leads or information and does not collect or store buyer's financial information.  EDUCASA direct Grants are funded by participating Realtor® Partners.  EDUCASA may also provide information on non-exclusive government grant and down payment assistance programs, where available.  Programs vary by state and all grant, down payment assistance and savings amounts are estimates.  You must be represented at closing by am EDUCASA Realtor® Partner to receive the Realtor® rebate portion of the EDUCASA grant.  Realtor® rebates are not available in AK, KS, LA, MS.  Benefits received may be affected by home price, for sale by owner properties (FSBO’s), new construction or other factors.  You must work with an EDUCASA preferred lender to receive additional benefits.