How common are 30-year mortgages?
Today, nearly 95 percent of existing U.S. mortgages have fixed interest rates; of those, more than three-quarters are for 30-year terms. No one set out to make the 30-year mortgage the standard.
The 30-year mortgage is the most common home loan term in the U.S. Whether it has a fixed or adjustable interest rate, it gives borrowers 30 years to pay the loan off. Because the payment gets spread out over 30 years, this mortgage generally offers the lowest monthly payments.
To keep mortgage payments affordable, the length of mortgages was extended to 20, 25 and 30 years. By the 1960s, the 30-year mortgage evolved into a new standard and became the most popular option on the mortgage market.
| Type of mortgage | Marketshare | Originations (Dollar volume) |
|---|---|---|
| Source: Home Mortgage Disclosure Act data, 2021 | ||
| 30-year fixed-rate | 70% | $3.91 trillion |
| 15-year fixed-rate | 9% | $486.73 billion |
| 5/1 ARM | 1% | $83.71 billion |
CalHFA and CalPLUS Conventional Loan Programs: With the CalHFA Conventional Loan Program, you can get a 30-year fixed-rate mortgage on the conventional market. This means you'll have access to competitively low interest rates, but you'll also need to meet qualification requirements.
While this isn't the most popular mortgage term, a 20-year mortgage exists alongside the more prevalent 15-year and 30-year loan terms. Let's explore exactly what a 20-year mortgage is before taking a closer look at the different types of 20-year home loans, as well as the pros and cons of this mortgage option.
15-year and 30-year mortgage differences
Commonly, homebuyers decide on a 15-year or 30-year term and repay the debt in equal monthly installments. (Though the choice is far from an even split: Freddie Mac has reported that 90% of home-purchase loans have 30-year terms.)
“It's a one-sided bet,” said John Y. Campbell, a Harvard economist who has argued that the 30-year mortgage contributes to inequality. “If inflation goes way up, the lenders lose and the borrowers win. Whereas if inflation goes down, the borrower just refinances.”
Most homebuyers choose a 30-year fixed-rate mortgage, but a 15-year mortgage can be a good choice for some. A 30-year mortgage can make your monthly payments more affordable.
Because a 30-year mortgage has a longer term, your monthly payments will be lower and your interest rate on the loan will be higher. So, over a 30-year term you'll pay less money each month, but you'll also make payments for twice as long and give the bank thousands more in interest.
Is 6% mortgage rate high?
“In today's market, 6% is a great rate compared to the historic average of a little over 7%,” Rueth said. “However, 6% no longer looks good because homeowners were spoiled by 2.75% mortgage rates a few years ago.” Homeowners also feel the burden of steep home prices, making those high rates hurt even more.
What Is the Average Mortgage Term in the US? The average length of a mortgage is 30 years, but that's not the amount of time that most borrowers will keep the loan. Homeowners only stay in a home for eight years on average, and many refinance their home loans.
Nearly 40% of U.S. homes are mortgage-free, census shows.
You Can Get a 30-year Mortgage at Any Age
You could be 99 years old and get a 30-year mortgage as long as you qualify. The lender may not deny a loan because they don't think you'll live long enough to pay it off.
- Better, 3.89%
- Bank of America, 4.20%
- Citibank, 4.23%
- Amerisave, 4.33%
- DHI Mortgage Company, 4.34%
- PNC Bank, 4.35%
- Home Point Financial, 4.35%
- Navy Federal Credit Union*, 4.38%
The average 30-year fixed rate reached an all-time record low of 2.65% in January 2021 before surging to 7.79% in October 2023, according to Freddie Mac.
HUD, nonprofit organizations, and private lenders can provide additional paths to homeownership for people who make less than $25,000 per year with down payment assistance, rent-to-own options, and proprietary loan options.
40% of Americans Pay Off Their House — Are They Doing Better Financially? For most Americans, a home mortgage is the biggest financial obligation they will ever have. A traditional mortgage spans 30 years and is often in the hundreds of thousands of dollars, so the interest charges can be enormous.
The average first-time buyer age is now 37 given this increased affordability, although with house prices remaining high, it's pushing closer to 40 and for good reason, according to House Buyer Bureau's research.
On a $200,000, 30-year mortgage with a 6% fixed interest rate, your monthly payment would come out to $1,199 — not including taxes or insurance. But this can vary greatly depending on your insurance policy, loan type, down payment size, and other factors.
Is it better to get a 30-year loan and pay it off in 15 years?
People with a 15-year term pay more per month than those with a 30-year term. In exchange, they are given a lower interest rate and will pay their loan off faster. Borrowers with a 15-year term pay their debt in half the time and possibly save thousands of dollars over the life of their mortgage.
Can a 70-Year-Old Get a 30-Year Mortgage? Yes. There is no age limit to a mortgage application. If you have a substantial down payment and a steady income (which can include pension and Social Security payments), you have a good chance of approval regardless of your age.
- Pay extra each month.
- Bi-weekly payments instead of monthly payments.
- Making one additional monthly payment each year.
- Refinance with a shorter-term mortgage.
- Recast your mortgage.
- Loan modification.
- Pay off other debts.
- Downsize.
Some 88.5 percent have a mortgage rate below 6 percent, down from a high of 92.8 percent of homeowners in in the second quarter of 2022, the report found. More than three-quarters of homeowners — 78.7 percent — have a mortgage rate below 5 percent, while nearly 6 in 10 — 59.4 percent — have a mortgage below 4 percent.
If you can demonstrate an ability to repay the loan before you're 75 years old, they will consider your application no matter your age! For example, if you needed to borrow $300,000 and were 50 years old, the standard 30-year mortgage term could be reduced to 25 years and your loan would be approved.
