The 15-year fixed rate mortgage offers the qualified consumer five big advantages.
1. You own your home in half the time it would take with a traditional mortgage.
2. You save more than half the amount of interest of a 30-year mortgage. On a $75,000 mortgage at 9.5 percent, you save more than $95,000.
3. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically 0.5 percent to 1.0 percent lower. It is this lower interest rate added to the shorter loan life that realizes the savings for 15-year fixed rate borrowers.
4. Fixed rate means exactly that - no matter where mortgage interest rates go, the payments for this mortgage stay the same from the first to the last. This helps many borrowers plan their budgets with more certainty. They know that their monthly payments will not increase (or decrease) and throw their financial planning off.
5. 15-year mortgages can be insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA), and with private mortgage insurance.
