On a $280,000 Loan, a 15-Year Mortgage Saves About $218,600
Written By
The 15-year mortgage still beats the 30-year on rate. In FreeRateUpdate’s lender network, the best advertised 15-year fixed purchase rate was a full point below the best 30-year on August 1, and on September 28 it was still 0.75 of a point lower.
Both rates went up in that time. The best 30-year moved from 6.125% to 6.5%, and the best 15-year from 5.125% to 5.75%. Those best rates came with points, 1.998 on the latest 30-year and 1.45 on the 15-year, and they’re advertised interest rates, not APRs or quotes.
| Date | Best 30-year | Best 15-year | Gap (percentage points) |
|---|---|---|---|
| July 11 | 5.875% | 4.99% | 0.89 |
| August 1 | 6.125% | 5.125% | 1.00 |
| September 1 | 5.99% | 5.25% | 0.74 |
| September 19 | 6.25% | 5.625% | 0.63 |
| September 28 | 6.5% | 5.75% | 0.75 |
What the lower rate is worth
Take a $280,000 loan that’s never refinanced and gets paid on schedule to the last payment. At the latest rates the 15-year’s principal and interest payment is about $555 a month more than the 30-year, up from about $531 at the August 1 rates.
The scheduled interest the 15-year saves, not counting points or closing costs, went up too, from about $210,600 to about $218,600. The 15-year gets there by paying the loan off in half the time, so a rise in rates makes its saving bigger.
