15-Year Mortgage Rates for April 2022

Buying a home is a major financial decision, so when you choose to become a homeowner, you’ll want to secure the right type of mortgage at the lowest possible rate. A 15-year mortgage is an attractive option if you’re looking to pay off your home loan sooner while saving on interest. The trade-off? A higher monthly payment. 

Current 15-year mortgage rate trends

Rates for the 15-year mortgage have remained between 3% to 4% from February into March. With the Fed’s recent increase to the federal funds rate to combat mounting inflation — and with multiple interest rates hikes expected this year —  right now could be your best chance to secure a low rate. Interest rates go up when inflation soars, and nowhere has the increase in prices been more apparent than in the real estate industry.

Home prices are expected to keep rising in 2022. The more expensive homes get, the bigger the mortgage you’ll need to afford that home. By locking in a rate now before mortgage rates climb higher, you could save money in interest. Make sure you shop around for mortgage lenders that can make worthwhile rates available to you. You should always meet with multiple lenders to figure out which loan offers make the most sense for your personal financial situation. 

Here’s what you need to know to lock in the best mortgage rate possible for a new home.

The pros of a 15-year fixed mortgage

• Shorter loan term: The obvious benefit of a 15-year fixed mortgage is that it takes half the length of time to pay off compared to a 30-year mortgage. You will have higher monthly payments, but you’ll pay this home loan off twice as fast, resulting in less interest over time. 
• Lower interest rates: Usually, 15-year fixed interest rates are lower than 30-year rates because the lender does not have to predict rates for an additional 15 years into the future, like they do for a 30-year loan. 
• Build equity in your home much faster: A 15-year fixed mortgage allows you to build more equity in your home faster. This means you can enjoy some of the advantages of homeownership, such as refinancing your home loan when rates go down again, sooner. Typically, to get a good refi rate, lenders like to see at least 20% in home equity.

The cons of a 15-year fixed mortgage

• Higher monthly payments: One downside to a 15-year mortgage is that you’re stuck with high monthly payments for the duration of the home loan. For example, say you make a 20% down payment on a $500,000 mortgage at a 4% interest rate with a 15-year fixed mortgage, your monthly payment will be about $3,350, compared to just $2,300 with a 30-year fixed mortgage.
• The maximum mortgage amount you can borrow is smaller: Since you’re making high payments every month, lenders will offer you a smaller mortgage amount than they might with a 30-year loan. This reduces the risk to the lender that you will default on the loan.
• Less financial flexibility overall: If you put all of your eggs into a 15-year mortgage, it could limit your opportunity to spend your money in other ways. For example, you may have less available to contribute to investment or retirement accounts. You may also have less of a financial cushion to fall back on if you run into difficulties.

Something to consider 

If you like the idea of paying off your mortgage sooner, but are worried about committing to higher monthly payments, there’s an alternative to consider. If you choose a 30-year mortgage over a 15-year mortgage, you can make additional payments throughout the year, which will help shorten your loan term. This allows you to effectively pay off your 30-year mortgage sooner, without locking yourself into the higher monthly payments that are attached to a 15-year mortgage.

Current mortgage interest rates

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The below table summarizes the average rates offered by lenders across the country.