You might be surprised to learn that 30 year fixed mortgage rates, while a good loan program, are not the only game in town. Traditional fixed rate mortgages are the most common type of loan program; but did you know they are available in terms ranging from 10 to 30 year fixed mortgage rates?
A fixed rate mortgage does exactly what it sounds like: your interest rate is “fixed” (meaning it will not change) for the entire term of the loan. You will make the exact same payment every month, year-in and year-out, until the loan is paid off.
Fixed rate mortgages can be paid off any time without penalty. The most common fixed rate mortgages are the 30 year and 15 year fixed mortgage rates. But home mortgage lenders can also offer loans with terms of 10, 20 and 25 years.
30 Year Fixed Mortgage Rates
The main advantage of 30 year fixed mortgage rates are lower monthly payments. Although you end up paying more interest throughout the length of the loan, the interest is 100% tax deductible.
15 Year Fixed Mortgage Rates
The main advantage of the 15 year fixed mortgage rates is that you can get a lower interest rate with a shorter term loan. This will save you a substantial amount ( really huge!) in interest payments throughout the life of the loan. Even though the term of the loan is half that of the 30 year loan, your payment will not be twice as much.
20 Year or 10 Year Fixed Mortgage Rates
These other two options are not as popular, but should be considered as viable options. The 20 year mortgage is a more affordable option for those who cannot afford to make the payment on a 15 year mortgage. A 10 year mortgage is a great way to finance the loan for a much shorter amount of time, without being having to do a completely cash transaction.
The best home mortgage lenders will discuss all options with you and help you make a choice that will benefit your long term financial outlook. With the exceptionally low interest rates, fixed rate mortgages are an incredibly sound choice for Austin home loans and refinancing.