what is 15 year fixed home loan mortgage


What is a 15 year fixed mortgage loan ?

A fixed rate mortgage is one where the interest rate does not change for the length of the loan. The loan is amortized over the length of the term and the per month mortgage payment is fixed. The term for this fixed rate mortgage loan is 15 years i.e the mortgage and interest has to be paid back in 15 years. The mortgage payment per month remains same all throughout the life of the loan. Lenders typically offer the 15 year fixed at a somewhat lower interest rate than the 30 year fixed.
The term of the home mortgage can be 10, 15, 20 or the popular 30 year fixed rate mortgage term. The way fixed mortgage loans are structured, the mortgage interest is front loaded. In the first years of the residential loan, the bulk of the monthly payments go to paying mortgage interest. It’s only later that you will start significantly building equity in your home as more of your mortgage payments go towards paying down the mortgage loan principal. A fixed rate mortgage is ideal for those who intend to stay in their properties for a long time.