Current 20-Year Mortgage Rates for January 2022

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What Is a 20-Year Fixed-Rate Mortgage?

A 20-year, fixed-rate mortgage is a home loan with a 20-year repayment period and a mortgage rate that will never change. With a 20-year mortgage, you’ll pay off the loan 10 years sooner than you would with the most popular type of home loan: the 30-year, fixed-rate mortgage.

So this type of mortgage can be good for homebuyers who want to be debt free more quickly and have the income to manage the higher payments that come with a shorter loan repayment term.

What Is a Good 20-Year Fixed Mortgage Rate?

Looking at historical mortgage rates, interest rates on all types of home loans have never been lower. The average rates for 20-year, fixed mortgages are around 3% or less right now. If you can qualify for an interest rate this low, then you’re getting an exceptional deal. 

However, the interest rate isn’t the only number you should pay attention to — the annual percentage rate (APR) is also important. The APR also factors certain fees into the rate and gives you a better idea of the overall cost of the loan.

How Does a 20-Year Mortgage Payment Compare to Other Terms?

Lenders offer lower interest rates for shorter-term loans, but because you’re repaying the loan more quickly, your monthly payments are higher. The table below shows how interest rates and loan terms impact your monthly payment and overall loan cost.

Loan TermLoan BalanceInterest RateMonthly PaymentTotal Interest
10 Years$250,0002.25%$2,328$29,418
15 Years$250,0002.30%$1,643$45,855
20 Years$250,0002.75%$1,355$75,332
30 Years$250,0003%$1,054$129,446

Pros and Cons of a 20-Year Mortgage


The most common types of mortgages have 30-year or 15-year repayment terms, so a 20-year mortgage has some of the advantages of both loan types. You’ll typically get a lower interest rate on a 20-year mortgage compared to a 30-year loan. And because it has a longer repayment period than a 15-year, it will have lower monthly payments.

If your goal is to pay off your mortgage as soon as possible, but you can’t afford a 10-year or 15-year mortgage, then a 20-year loan is a good middle ground.


Compared to the 30-year, fixed-rate mortgage, a 20-year fixed-rate mortgage has larger monthly payments. So depending on your budget, it can be an unaffordable mortgage for some homebuyers — especially in high-cost areas.

On the other hand, if you can afford a 15-year fixed-rate mortgage, it’ll have a lower rate than a 20-year loan. So with a 20-year mortgage you’ll end up paying more interest and won’t build equity as quickly.

Fees to Consider With a 20-Year Mortgage

The repayment term of your mortgage won’t impact the fees you pay on the loan. So a 15-year, 20-year, or 30-year mortgage will have the exact same closing costs, all else equal.

What will affect the fees you pay is the lender you choose. So it’s worth the extra effort to compare offers and find the best mortgage lender.

Closing costs range from 2% to 6% of the loan amount, and lowering those fees by just 1% can save you thousands of dollars. A detailed estimate of your closing costs is included on the Loan Estimate, which the lender is required to provide you within three business days of submitting an application. Once you have a few offers in hand, you can compare fees and select the best deal.

How To Pick the Right Mortgage Loan Term For You

Ultimately, deciding which mortgage term is best for you depends on your personal situation and goals. Can you afford a higher monthly payment? Do you care about building equity in your home faster, or paying off your mortgage sooner? If so, then a 15-year mortgage could be for you. But if you can’t afford a high monthly payment, or if you would be better off spending that money elsewhere, then a 30-year mortgage would likely be a better bet. If you want a compromise between the two options, a 20-year mortgage might be able to provide that.