Why Choose a 30-Year Fixed-Rate Mortgage
The most common mortgage in the country.
Pay Less Per Month
Spreads out your payments over the longest term for potential monthly savings.
Greater Buying Power
Helps you qualify for a higher loan amount compared to a shorter-term mortgage.
Breathing Room for Your Budget
Offers potential financial flexibility for everyday expenses, home improvements and savings. .
How a Conventional Fixed-Rate Mortgage Works
Rate
Same interest rate for the life of the loan.
Term
Pay off your loan in 30 years.
Principal + Interest
Predictable monthly payments.
Taxes + Insurance
Tax and home insurance costs may change over time and are sometimes paid through an escrow account.
The Breakdown
5%
Minimum Down Payment For Most Conventional Loans
580+
Credit Score
≤45%
Debt-to-Income Ratio
Run the Numbers
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Frequently Asked Questions
How does a 30-year fixed-rate mortgage work?
A 30-year fixed-rate mortgage has a fixed interest rate and a fixed 30-year repayment term set at closing. Because the rate never changes, the principal-and-interest portion of your monthly payment remains the same for the life of the loan. The loan is fully paid off after 30 years if you make all scheduled payments and do not refinance or sell the home.
While the principal-and-interest payment stays constant, your total monthly mortgage payment can change if property taxes or homeowners insurance costs rise or fall. At loanDepot, the same 30-year fixed mortgage structure is available for both home purchases and refinances.
30-year vs 15-year fixed-rate mortgage: How do I choose?
The choice between a 30-year and 15-year fixed mortgage comes down to monthly payment versus total interest savings. A 30-year loan spreads repayment over 360 months and will generally have a lower monthly principal-and-interest payment than an equivalent 15-year loan. A 15-year loan requires a higher monthly payment but pays off the mortgage in half the time. The right option depends on your financial goals. Regardless of which term you choose, you can make extra principal payments to pay off the loan faster or refinance later if your needs change.
The right option depends on your financial goals. Regardless of which term you choose, you can make extra principal payments to pay off the loan faster or refinance later if your needs change.
How can I pay off a 30-year fixed-rate mortgage faster?
loanDepot’s 30-year fixed-rate mortgage products do not include a prepayment penalty. As a result, borrowers may make additional principal payments to reduce the outstanding balance more quickly. You can do these multiple ways, such as by adding a few extra dollars to your monthly principal payment, making biweekly payments (half your monthly payment every two weeks), or making a one-time lump-sum payment when you have extra cash on hand. You can also apply for a refinance from a 30-year to a 15-year term.
Why is the 30-year fixed America’s most popular mortgage?
The 30-year fixed-rate mortgage has been the most common home loan in the United States since it was first introduced in 1934. There are several reasons for this. The first is affordability. Because the loan is spread out across 30 years, it has the lowest possible monthly principal-and-interest payment of any given loan amount. A lower monthly payment also means buyers have more buying power and can qualify for larger home purchase prices. Lower monthly payments also mean more cash-flow, giving buyers the ability to save toward retirement, kids’ college, or whatever else they need.
The length of a 30-year fixed loan protects it from inflation as well. With your monthly principal-and-interest payment fixed in today’s dollars, borrowers are insulated from rising prices and can transfer inflation risk to the lender. Finally, 30-year fixed loans can be refinanced at any time. If rates drop, you refinance into a new loan at the lower rate. If your situation changes and you want to be mortgage-free sooner, you refinance into a 15-year or pay extra principal. The 30-year is the most flexible starting point.
Can you refinance a 30-year fixed-rate mortgage?
In many cases, a 30-year fixed-rate mortgage may be refinanced if eligibility requirements are met. Available refinance options, timing requirements, and qualification standards may vary based on the loan program and borrower circumstances.