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In the United States it is not common to find mortgages with amortization terms of less than 15 years, as this is usually the minimum offered by banks and financial institutions, with the maximum usually being 30 years, either for fixed or adjustable interest rates.
Even so, if you want to pay back the money before the end of the agreed period, you can always amortize in advance all or part of the outstanding amount. However, this operation may entail additional costs and commissions, so it is best to find out more before taking out the mortgage.
On this page we show you the average interest rate of mortgage loans with a repayment period of 15 years. You can also see the evolution of this value over the last years.
What are the advantages of a 15-year mortgage?
Choosing the shortest possible term for a mortgage has many advantages, but the main one is that you will pay much less interest.
This is because the number of installments affects the amount of interest you pay each month. For mortgages with longer terms it is common to find that in the first few months you pay more interest than principal.
In addition, the banks themselves offer lower interest rates for 15-year mortgages than for 30-year mortgages, which adds to the above and makes them doubly advantageous.
It is true that the installment of a short-term mortgage is higher than that of a longer-term mortgage, so the ideal is to make calculations to pay the highest installment that we can afford without having to tighten our belts.
To do this, it is best to use a mortgage calculator like the one we offer at Busconómico, with which you can calculate both the PI (Principal + Interest) and the PITI, which also includes taxes and insurance.
How is the average value of interest rates calculated?
To obtain the average percentage applied by banks on their mortgages, the rates offered by the top 10 U.S. banks in the 10 most populated states in the country are compiled.
This represents more than half of the new mortgage loans granted, so it is a figure that allows us to get an idea of the situation and evolution of the market.
The value is obtained daily, and the calculation is made by the online portal Bankrate, which also offers average rates for other terms and types of mortgages.
What does the interest rate of your mortgage depend on?
In addition to the term, which we have already mentioned that you get a lower rate for shorter periods than for longer ones, there are other factors that also influence the percentage that the bank finally applies to you.
In the United States and in most countries, mortgage interest rates are linked to the official interest rates applied by the corresponding Central Bank, in this case the Federal Reserve. This rate is totally unrelated to the banks and the client, and will therefore depend on the macroeconomic situation.
After this factor, the main cause of rate variation is your creditworthiness. This includes your credit score and credit profile as well as your economic and employment situation, the salary you earn and the stability of your income.
Español: Tasas de las hipotecas a 15 años