The Best 15-Year Mortgage Lenders of 2019
Most homebuyers opt for a 30-year mortgage when they purchase a home because it offers the lowest monthly payment at competitive interest rates. The disadvantage, though, is that you’ll be paying hundreds of thousands of dollars in interest over the life of the loan.
A 15-year mortgage cuts that payoff time in half, saving a substantial amount of money on interest. Rates on 15-year mortgages also tend to run lower than 30-year fixed-rate mortgage loans, which adds to the savings over time.
If you have the room in your budget to make the higher monthly payment that comes with paying off a mortgage in a shorter time period, then a 15-year mortgage may be worth considering.
LendingTree reviewed data from hundreds of lenders that offer 15-year fixed rate conventional purchase loans to come up with the top five lenders of 2019. Our ratings are based primarily on the interest rate terms offered to borrowers on LendingTree over the last 12 months. Then we take into account the quality of information each lender provides on their websites. You can read up on our full methodology below.
Here are the top five 15-year fixed rate conventional purchase lenders of 2019.
| Axos Bank
Axos Bank originally opened in 2000 under the name of Bank of Internet USA, as a digital bank offering basic checking accounts. Axos now offers a full range of standard banking products as well as mortgages, and is headquartered in San Diego.
Axos Bank offered a median 15-year fixed conventional purchase rate of 3.79% on the LendingTree platform.
The Axos website landing page features tabs with basic information about buying a home and refinancing. These pages also feature additional articles and tools for learning more about the benefits and costs of different loan types, as well as explanations for the mortgage products Axos Bank offers.
The “Apply now” button is easy to find on these pages, and consumers have the option to get an instant rate quote, apply online or learn more about a particular subject.
| KS StateBank
KS StateBank was founded as Kansas State Bank of Manhattan in 1969. The bank is based in Manhattan, Kan., and has branches in Minnesota, Arizona and Missouri.
KS State Bank offered a median 15-year fixed conventional purchase rate of 4.16% on the LendingTree platform.
The homepage of the bank’s website features general home loan product information under the “Personal” drop-down menu. It also includes a link to a checklist of documents needed for each loan type, a glossary of mortgage terms and mortgage calculators.
There is no “Apply now” button, but there is a “Find a lender and apply today” link that takes the reader to a page where customers can choose a general application to fill out, or a list of loan officers at each of the bank’s branches to contact directly.
| Goldwater Bank
Goldwater Bank was founded in 2007 and offers traditional banking services such as credit cards and checking and savings accounts, in addition to mortgage products. The company is headquartered in Phoenix.
Goldwater Bank offered a 15-year fixed conventional purchase mortgage rate of 4.17% on the LendingTree platform.
The homepage features a “Home loans” tab with basic product and loan type information. There are no articles or mortgage tools on the site, but there is an “Online application” button on the home loans page that gives consumers the option to create an account and complete a digital loan application.
| ConsumerDirect Mortgage
ConsumerDirect Mortgage is a division of FirstBank, which started in 1906 under the name Farmers State Bank in west Tennessee. FirstBank provides a variety of financial services and products, while ConsumerDirect Mortgage provides mortgage products and services for its customers.
ConsumerDirect Mortgage, a Division of FirstBank offered a median 15-year conventional fixed purchase rate of 3.98%.
The homepage for ConsumerDirect Mortgage indicates the loan product types offered but does not provide any details about the terms of the loans offered. There are no calculators or educational content. The homepage does not feature an “Apply now” button, although there is a ConsumerDirect Mortgage link that takes the customer to an online loan application portal.
| The Federal Savings Bank
The Federal Savings Bank is a federally chartered bank with the ability to finance mortgages in all 50 states. In addition to home loan programs, the bank offers deposit products such as checking, savings, CDs and money market accounts.
The Federal Savings Bank offered a median 15-year fixed conventional purchase rate of 4.22% on the LendingTree platform.
The bank’s website provides detailed mortgage product information on the homepage, with further information available by clicking through to each type of loan program offered. Consumers can also find many informational articles under the mortgage section of the website.
The Federal Savings Bank also provides a wide array of mortgage calculator options, as well as investment calculator options for topics as unique as how to save a million dollars. These tools provide additional value to a customer who might be searching for information on how to save for a down payment.
There is no “Apply now” button, but the “Get started” button takes the consumer to an online mortgage application portal.
How we choose our “best” lenders
Our “best” winners aren’t chosen based on rate alone, but also with a unique rating developed by our editorial staff called “Online Information Quality,” or OIQ. We’ve taken extra time to review the information you can access online, including how easy it is to access loan product information and mortgage tools like mortgage calculators, and to fill out a loan application.
To determine the best 15-year fixed conventional purchase lenders, we analyzed data from actual loan terms offered by lenders to borrowers on LendingTree. We chose the top five lenders by rate for the last 12 months. Then we selected for lenders that originate mortgages in at least 25 states. From that list, we gave each lender an OIQ rating based on answers to the following when accessing the lender’s main website. One point was given for each yes answer.
Is there general product information on the website?
If the website features both basic terms of the loan (30-year, 15-year, adjustable rates) and program offerings (FHA, Conventional, FHA, VA), it scores a full point.
Is the general home loan information easy to find?
If the information is available within two clicks on the homepage, it scores an extra point, since a consumer will be able to get the information easily without having to search extensively through the site.
Are there any education tools (e.g., loan calculators) on the page or at least one click away from the homepage?
Mortgage calculators, home value estimators and other tools help consumers to make educated decisions, so landing pages that feature them score an additional OIQ point.
Is it easy to find the “apply now” button?
Mortgage users in the digital age want a quick online way to apply for a mortgage, so if the “Apply now” button is easy to find on the homepage, it will be easy for a consumer to apply once they’ve gotten the information they need to proceed to the next step in the mortgage process.
Tips for shopping for a 15-year fixed conventional purchase mortgage
Most lenders will price the most competitively on 30-year fixed mortgages, so you might need to shop around a little bit more to get the best 15-year pricing. You can use a comparison tool to get a baseline of what lenders are offering in your area to begin determining if a 15-year conventional loan makes sense.
While APR is a good baseline to determine competitive offers, you should always look at the itemized fees on your loan estimate, ignoring recurring costs like property taxes and insurance, because those fees will be the same regardless of which lender you choose. Also, keep in mind often the escrow or title company is often chosen by the seller, meaning the fees will be the same regardless of the lender you choose for your purchase.
Tip 1: Know your three Cs
In the world of mortgage underwriting, the “three Cs” are credit, capacity and collateral. These three factors can result in the approval or decline of any mortgage application, so before you get started, you need to know how each of them relates to your financial situation.
In order to get an accurate rate quote on any mortgage product, you need to know your credit scores. Lenders analyze if you’ve made on-time payments, how much credit you have, how long you’ve had it and which types of credit you have.
Conventional 15-year loans have the same basic credit requirements as a 30-year conventional loan, with most lenders requiring a 620 credit score.
Capacity is a measure of the income you earn every month compared with how much total debt you’ll have once your potential new house payment is factored in. This is more commonly referred to as your debt-to-income ratio (DTI), and it’s calculated by dividing your total monthly debt by your before-tax income.
The same 50% maximum DTI requirements apply to 15-year fixed conventional loans. Because your payment is higher, you may get closer to the maximum DTI faster than you would on a 30-year fixed conventional loan.
When it comes to a refinance, the other capacity calculation important to a lender is your loan to value ratio (LTV). This calculates the total percentage of loan you are borrowing compared with your home’s value. You can borrow up to 97% of a home’s value with conventional loan programs, as long as you don’t exceed the DTI requirements.
The term collateral relates to the type of property you are buying. Purchasing a condominium or manufactured home comes with different rules than buying a single-family residence, and to get an accurate rate quote, you’ll need to make sure you price your rate based on the type of property you are buying.
In most cases, the lender will require a full appraisal inspection to confirm the value of the property you intend to purchase, and if the appraisal comes in low, you’ll either need to pay the difference, negotiate a lower sales price or end up borrowing at a higher LTV, which could increase your interest rate and closing costs.
Tip 2: Know the loan programs you qualify for
A 15-year fixed conventional loan comes with a higher payment, which means your DTI will be higher than if you qualify for a 30-year fixed conventional loan. The good news is even if you can’t qualify for a 30-year fixed loan, you can always make extra principal payments on a 30-year fixed mortgage to pay the loan off faster.
Ask your loan officer for an amortization schedule with some options for how much extra principal you’d need to pay each month to pay your loan off in 15 years. Although 30-year rates are higher, you can still save thousands on your loan if you make extra principal payments each month.
Tip 3: Get your rate quotes on the same day, in writing
Interest rates and the costs associated with them fluctuate on a daily, sometimes hourly basis. In order to get an apples-to-apples comparison, you also need to make sure you provide the same information to each lender.
Tip 4: Only compare the lender fees when making your decision
Loan estimates contain a lot of information about the costs associated with a mortgage, but the only items you’ll want to consider as you are refinance shopping are lender fees. These can include origination, discount, underwriting, processing, appraisals and credit reports.
Ignore costs like title fees, prepaid interest, property taxes and homeowners insurance and mortgage insurance — those fees will be the same regardless of the lender you choose. One helpful tip: Even though your mortgage company may have a preferred title company, you aren’t required to use them on a refinance, so be sure you shop around a few title companies to make sure the fees are competitive.
The information in this article is accurate as of the date of publishing.