Can You Get a 20-Year Mortgage?
The 20-year fixed-rate mortgage makes sense if you want to pay off the mortgage quickly.
A monthly over payment on top of the required monthly payment can help you pay off your mortgage even faster.
Plus, the 20-year fixed interest rate is lower than the 30-year rate — but keep in mind that it's higher than the 15-year interest rate.
20-Year Mortgages vs. 30- Year Mortgages
The obvious benefit of the 20-year mortgage is that the loan will payoff in 20-years. Plus, the interest rate is lower than the 30-year mortgage rate by about 0.25%.
However, compared to the 30-year mortgage, your monthly payment will be higher because there are only 240 payments in the 20-year mortgage, compared to 360 payments with a 30-year mortgage.
30-year Mortgage | 20-year Mortgage | Difference | |
|---|---|---|---|
Loan Amount | 100,000 | 100,000 | |
Monthly Payment | $553 | $660 | $107 |
Interest Rate | 5.25% | 5.00% | |
Total Interest Paid | $98,793 | $58,389 | $40,404 |
Frequently Asked Questions About 20-Year Fixed Mortgage Rates
When can you get a 20-year mortgage?
20-year mortgages are available for purchase and refinance loans.
How can I get the lowest mortgage rate?
The best way to get a lower interest rate is to increase your credit score. Many people are surprised to learn that credit scores are tied to interest rates.
Take a look at your credit report — it's free from Equifax, Experian, and TransUnion.
Is a 20-year mortgage a good idea?
Everybody's situation is different, but if you intend to make over payments on your mortgage, then a 20-year mortgage is a good idea due to the lower interest rate.
Is a 20-year mortgage worth it?
If you can afford the payment, a 20-year mortgage is worth it because of the interest savings.