• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Current 20-year mortgage rate

The average 20-year fixed rate mortgage is currently 6.37% APR.

Stop overpaying for home insurance

Home insurance is an essential expense – one that can often be pricey. You can lower your monthly recurring expenses by finding a more economical alternative for home insurance.

Officialhomeinsurance can help you do just that. Their online marketplace of vetted home insurance providers allows you to quickly shop around for rates from the country’s top insurance companies, and ensure you’re paying the lowest price possible for your home insurance.

Explore better rates

What is a 20-year mortgage?

A 20-year fixed rate mortgage is one that has an amortization period of 20 years. During that time, the interest rate remains unchanged, creating greater predictability for your budgeting.

Advantages and disadvantages of a 20-year mortgage

If you want to pay your mortgage off in a relatively quick amount of time, but are wary of the high monthly costs of a 15-year mortgage, then a 20-year fixed rate mortgage might be for you.


  • Predictable payments. Because you’re locked into your interest rate, you don’t face the same uncertainty you would with an adjustable-rate mortgage (ARM)
  • Lower interest rate than a 30-year loan
  • Own your home in 10 fewer years than with a 30-year mortgage
  • Pay less in interest over the life of your mortgage than with a 30-year loan


  • Higher monthly costs than with a 30-year mortgage
  • Harder to qualify. Since lenders will want to ensure you can afford the higher monthly fees, they will want to ensure you have a low debt-to-income (DTI) ratio
  • Higher interest rates than with a 10- or 15-year loan
  • You pay more in interest over the lifetime of the loan than with a shorter-term mortgage

Need cash? Tap into your home equity

As home prices have increased, the average homeowner is sitting on a record amount of home equity. Savvy homeowners are tapping into their equity to consolidate debt, pay for home improvements, or tackle unexpected expenses. Rocket Mortgage, the nation's largest mortgage lender, offers competitive rates and expert guidance.

Get Started

Is a 20-year fixed mortgage a good idea?

A 20-year fixed-rate mortgage is a great option if you’re looking for a shorter term, but can’t afford the higher monthly costs associated with a 10- or 15-year mortgage.

WIth the predictability of monthly payments, 20-year mortgages can help you create a stable budget, so long as you can afford paying a little more than you would with a 30-year mortgage.

Compared to a 10- or 15-year fixed rate mortgage, a 20-year option means you will pay more in interest on your loan, but still less than a 30-year.

You'll find 20-year loans are not as common as 30-year mortgages, if you’re in the market for a new mortgage, be sure to inquire if this option is available to you.

20-year vs 30-year mortgage

A 30-year mortgage offers you lower monthly payments than other mortgages, but you will ultimately be paying more in interest. A 20-year mortgage offers a lower interest rate than a 30-year mortgage, and you will pay less in interest over the lifetime of the loan.

If you purchased a $375,000 home with a downpayment of 20%, you would require a loan of $300,000. With a 20-year mortgage at an interest rate of 5.77%, your monthly costs would be approximately $2,098. Over the lifespan of your mortgage, you will pay approximately $203,522 in interest alone. Compare this with a 30-year mortgage at an interest rate of 6%, where your lifetime interest payments would amount to approximately $342,409.

While you might get a larger loan with a 30-year mortgage than you would with a 20-year mortgage, a 20-year loan allows you to build equity faster and own your home sooner.

When looking to purchase a home, consider if there are any renovations that you would anticipate wanting to perform in the next 10 years. With a 20-year mortgage, you will be building equity at a greater rate, allowing you to have a greater sum of money available to you through a home equity line of credit (HELOC).

While you still will be creating equity with a 30-year mortgage, this will be at a slower pace, meaning you won’t have as much money available to you.

Can I refinance to a 20-year mortgage?

Refinancing a mortgage can help you reduce your mortgage payments or allow you to pay less interest on your loan. Sometimes, it can do both, but usually it’s one or the other.

When thinking about refinancing, take a close look at your debt-to-income ratio to determine your maximum budget for a monthly mortgage payment. Chances are that by refinancing, your monthly payments will go up since you’ll be paying more to the loan’s principal and less to interest.

If you’re refinancing your mortgage from a shorter-term to a longer-term one, for instance, from a 15-year to a 20-year mortgage, you will most likely pay less on a month-to-month basis. However, you will ultimately be paying more in interest. If you are in a position where making your monthly payments is pushing your budget to the limit, refinancing a shorter-term mortgage to a 20-year might be your best bet.

If you’re looking to get your mortgage paid off quickly, and don’t mind the additional monthly fees, then refinancing to a 20-year from a longer-term could be for you. While you won’t be able to pay off your mortgage as quickly as with a 10- or 15-year, and your interest rate will be higher than with those, a 20-year offers a comfortable middle ground.

When refinancing, be sure to consider the closing fees and other hidden costs associated. Sometimes it’s possible to get these costs folded into your mortgage, but you’ll want to speak to your lender about what these costs are and if this is an option.

How to get the best 20-year fixed rate

If you’re looking for a mortgage, taking a look at what a 20-year fixed-rate can offer is a good idea. There’s more stability with the monthly payment amount, but you have to budget appropriately. Also understand that you will need to pass a certain threshold for your debt-to-income ratio to be able to qualify.

After you’ve looked at your finances, here are some steps to ensure you get the best 20--year fixed rate mortgage.

Comparison shop

When looking for a mortgage, comparison shopping should always be one of your first steps. If you already have a mortgage and are purchasing a new home, talk to your provider to find out if they offer a 20-year and what the rates are. You might be able to get a good deal because you’re already an existing customer.

Even if it looks like your lender can provide a great deal on a 20-year mortgage, speak to other loan providers. They may offer an even better rate, or better terms than you’re presently getting.

You can also talk to a mortgage broker who can help you find the best rate on a 20-year mortgage. You’ll have to pay a fee to the broker for their services, but you usually make up for this in the savings you get on the loan.

Improve your credit score

Your credit score is critical to getting a loan. In fact, it’s one of the first things lenders look at.

You usually need a credit score of 620 or higher to get a conventional mortgage. With an even higher score, you might get a better rate on your mortgage — not to mention faster approval.

You can improve your credit score by doing some of the following:

Keep your credit card balance low: Make sure your credit card is paid off every month and you’ve got no carry over. It also helps to keep your purchases below your card limit. Typically, you want to be somewhere below the 30% mark.

Ensure your bills are paid: No matter what the bill is for, make sure you pay it on time. Keeping your bills paid is one of the key factors in getting a good credit score.

Get your credit report in advance: Check your score with Transunion, Equifax and Experien. Check over a copy of your report and make sure there are no mistakes. If you notice anything off, report it and get it tended to as soon as possible.

Take note that some lenders use your Fair Isaac Corporation (FICO) score to see if you can get a mortgage. Your FICO score is made up of all your credit reports, so you want to check each one for any mistakes.

Use your credit card: Credit companies want to see that you can handle your debt, so make sure you use your credit card - and be sure to pay it off. This can help improve your credit score, as well as increasing your credit limit.

If you have more than one credit card, pay them all off. Having more than one credit card doesn’t improve your credit score, in fact, it can have the inverse effect.

Increase your down payment

Buying a house is a huge investment. And with rising interest rates, any chance you have to save some money is worth looking at. Putting a larger down payment on a home purchase means that you’ll have less principal to pay over the course of your mortgage. This will lead to lower monthly fees.

If you put a down payment of over 20% on your home, you don’t have to pay for mortgage insurance. While putting down less money upfront can be beneficial in the short term, a high downpayment can provide long-term benefits.


This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

James Battiston Content Specialist

James Battiston has been writing personal finance articles for various websites for the past four years. He has a background in film and TV production, and can often be found consuming far too much coffee.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.