20 Year Fixed Rate Mortgage
20 Year fixed rate mortgages are Fannie Mae 's flagship products, since many consumers prefer the stability of both a fixed interest rate and a fixed payment over the life of the loan.
With a 20-year fixed-rate mortgage, you can build up equity in your home more quickly than with a traditional 30-year mortgage and save interest over the life of your loan. As with all fixed-rate mortgages, the interest on your loan never changes, bringing you peace of mind that your principal and interest payments will remain level over time. However, higher monthly mortgage payments may make the 20-year fixed-rate mortgage more difficult to qualify for compared to the 30-year fixed-rate mortgage.
- You pay less interest over the life of your loan, compared to a 30-year fixed-rate mortgage. For example, on a $100,000 loan at 8.25 percent interest, the 20-year fixed-rate mortgage can save you over $65,000 in interest payments when compared to a 30-year mortgage.
- Interest rate payments in the early years of the mortgage are comparable to a 30-year fixed-rate mortgage, allowing for a sizable mortgage interest tax deduction.
- Your monthly payments are less than for a 15-year mortgage, allowing you a greater chance to qualify for this type of mortgage.
- Lock in a long-term interest rate with a stable, predictable monthly payment
- Borrowers who want to build equity faster should select the shortest loan term they can afford
2006 Conforming Loan Limits
Alaska, Guam, Hawaii,
and U.S. Virgin Islands only
1 $417,000 $625,500 2 $533,850 $800,775 3 $645,300 $967,950 4 $801,950 $1,202,925