Getting a mortgage is one of the biggest financial decisions you can make. Choosing the right mortgage term length is crucial, as it determines how much you’ll pay each month and how long it will take to pay off your home loan. While 30-year and 15-year mortgages are the most common, 25-year mortgages are also an option worth considering for some homebuyers. In this comprehensive guide, we’ll cover everything you need to know about 25-year mortgages and help you determine if this lesser-known loan term is right for you.
What is a 25-Year Mortgage?
A 25-year mortgage is simply a home loan with a 25 year repayment term. With a 25-year fixed rate mortgage, you’ll make monthly principal and interest payments for 25 years until your loan is paid off.
The 25-year term sits right between the more widely available 15-year and 30-year options As such, it offers a balance of pros and cons from each
- Lower interest rates than a 30-year mortgage
- Lower monthly payments than a 15-year loan
- Faster payoff than a 30-year term
- Higher total interest paid than a 15-year mortgage
25-year mortgages can be fixed rate or adjustable rate. Fixed rate 25-year mortgages have an interest rate that stays the same for the full loan term. Adjustable rate mortgages (ARMs) have interest rates that can change periodically after an initial fixed period.
Benefits of a 25-Year Mortgage
There are several potential benefits that make a 25-year mortgage worth considering for some homebuyers:
Lower Monthly Payments Than a 15-Year Mortgage
The longer repayment term means you’re spreading out your loan balance over more years resulting in a lower monthly payment compared to a 15-year loan for the same loan amount. This can help make homeownership more affordable especially if your budget is tight.
Lower Interest Rates Than a 30-Year Mortgage
Lenders offer lower interest rates on 25-year mortgages than 30-year loans. This translates into interest savings over the life of your loan.
Faster Payoff Than a 30-Year Mortgage
With a 25-year mortgage, you’ll pay off your home loan five years faster than a 30-year term. This allows you to build equity faster.
Possible Lower Lifetime Interest Paid Than a 30-Year Mortgage
While you may pay more total interest than with a 15-year loan, you could potentially pay less overall interest with a 25-year mortgage than a 30-year option. However, this depends on the specific interest rates offered.
Drawbacks of a 25-Year Mortgage
Of course, 25-year mortgages also come with some potential downsides to weigh:
Higher Monthly Payments Than a 30-Year Mortgage
Despite having lower monthly payments than a 15-year mortgage, you’ll still have higher payments compared to taking out a 30-year loan for the same amount borrowed.
Higher Total Interest Paid Than a 15-Year Mortgage
Because you’re borrowing for ten more years than a 15-year term, you’ll pay more total interest with a 25-year mortgage. How much more will depend on the loan amount, interest rate, and other factors.
Limited Availability
The 25-year option isn’t offered everywhere. You may need to shop around more to find a lender that provides 25-year mortgages. Online lenders are more likely to offer them than brick-and-mortar banks.
Who is a 25-Year Mortgage Right For?
A 25-year mortgage can be a good fit for certain borrowers, such as:
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Homebuyers who want lower monthly payments but also want to pay off their mortgage faster than a 30-year timeframe.
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Borrowers who can qualify for interest rates only slightly higher than 15-year rates. The rate gap between 15- and 25-year loans is often smaller than between 30- and 15-year options.
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Homebuyers who plan to move before their mortgage is paid off, so the faster equity buildup of a 25-year term is beneficial.
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Those seeking a compromise between affordability and fast payoff. The 25-year balances these factors.
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Borrowers who value payment stability and want to lock in a fixed rate but don’t need a full 30-year term.
How to Get a 25-Year Mortgage
If you think a 25-year mortgage aligns well with your homebuying goals and financial situation, here are some tips for getting one:
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Shop around and compare quotes from multiple lenders to find one that offers 25-year loans and competitive rates. Online lenders are a good option.
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Get pre-approved to show sellers you’re a serious buyer and lock in a rate. Meeting general mortgage eligibility standards for credit score, debt-to-income ratio, and down payment amount will help ensure approval.
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Compare total interest paid between loan options using mortgage calculators. Weigh monthly savings vs overall interest savings when choosing between 25- and 30-year terms.
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If you currently have a 30-year mortgage, you may be able to refinance into a 25-year loan to benefit from the faster payoff.
The Bottom Line
While not as widely available as other options, 25-year mortgages can offer an appealing midpoint for some borrowers between the affordability of a 30-year loan and the faster equity buildup of a 15-year term. Just be sure to shop around, compare interest rates and payments, and weigh the pros and cons carefully to determine if it aligns with your specific financial situation and goals. With the right research and preparation, a 25-year mortgage could provide the ideal loan term length for you.
Historical 30-YR Mortgage Rates
The following table lists historical average annual mortgage rates for conforming 30-year mortgages. 25-year mortgages tend to be priced at roughly 0.15% lower than 30-year mortgages. 2023 data is through the end of November.
| Year | 30-YR FRM Rate | 30-YR Points | 15-YR FRM Rate | 15-YR Points | 15 vs 30 Rate Diff |
|---|---|---|---|---|---|
| 2023 | 6.81 | 6.11 | -0.70 | ||
| 2022 | 5.34 | 0.81 | 4.58 | 0.85 | -0.76 |
| 2021 | 2.96 | 0.68 | 2.27 | 0.64 | -0.69 |
| 2020 | 3.11 | 0.73 | 2.60 | 0.69 | -0.51 |
| 2019 | 3.94 | 0.5 | 3.39 | 0.5 | -0.55 |
| 2018 | 4.54 | 0.5 | 4.00 | 0.5 | -0.54 |
| 2017 | 3.99 | 0.5 | 3.27 | 0.5 | -0.72 |
| 2016 | 3.65 | 0.5 | 2.93 | 0.5 | -0.72 |
| 2015 | 3.85 | 0.6 | 3.09 | 0.6 | -0.76 |
| 2014 | 4.17 | 0.6 | 3.29 | 0.6 | -0.88 |
| 2013 | 3.98 | 0.7 | 3.11 | 0.7 | -0.87 |
| 2012 | 3.66 | 0.7 | 2.93 | 0.7 | -0.73 |
| 2011 | 4.45 | 0.7 | 3.68 | 0.7 | -0.77 |
| 2010 | 4.69 | 0.7 | 4.1 | 0.7 | -0.59 |
| 2009 | 5.04 | 0.7 | 4.57 | 0.7 | -0.47 |
| 2008 | 6.03 | 0.6 | 5.62 | 0.6 | -0.41 |
| 2007 | 6.34 | 0.4 | 6.03 | 0.4 | -0.31 |
| 2006 | 6.41 | 0.5 | 6.07 | 0.5 | -0.34 |
| 2005 | 5.87 | 0.6 | 5.42 | 0.6 | -0.45 |
| 2004 | 5.84 | 0.7 | 5.21 | 0.6 | -0.63 |
| 2003 | 5.83 | 0.6 | 5.17 | 0.6 | -0.66 |
| 2002 | 6.54 | 0.6 | 5.98 | 0.6 | -0.56 |
| 2001 | 6.97 | 0.9 | 6.5 | 0.9 | -0.47 |
| 2000 | 8.05 | 1 | 7.72 | 1 | -0.33 |
| 1999 | 7.44 | 1 | 7.06 | 1 | -0.38 |
| 1998 | 6.94 | 1.1 | 6.59 | 1.1 | -0.35 |
| 1997 | 7.6 | 1.7 | 7.13 | 1.7 | -0.47 |
| 1996 | 7.81 | 1.7 | 7.32 | 1.7 | -0.49 |
| 1995 | 7.93 | 1.8 | 7.48 | 1.8 | -0.45 |
| 1994 | 8.38 | 1.8 | 7.86 | 1.8 | -0.52 |
| 1993 | 7.31 | 1.6 | 6.83 | 1.6 | -0.48 |
| 1992 | 8.39 | 1.7 | 7.96 | 1.7 | -0.43 |
| 1991 | 9.25 | 2 | |||
| 1990 | 10.13 | 2.1 | |||
| 1989 | 10.32 | 2.1 | |||
| 1988 | 10.34 | 2.1 | |||
| 1987 | 10.21 | 2.2 | |||
| 1986 | 10.19 | 2.2 | |||
| 1985 | 12.43 | 2.5 | |||
| 1984 | 13.88 | 2.5 | |||
| 1983 | 13.24 | 2.1 | |||
| 1982 | 16.04 | 2.2 | |||
| 1981 | 16.63 | 2.1 | |||
| 1980 | 13.74 | 1.8 | |||
| 1979 | 11.2 | 1.6 | |||
| 1978 | 9.64 | 1.3 | |||
| 1977 | 8.85 | 1.1 | |||
| 1976 | 8.87 | 1.1 | |||
| 1975 | 9.05 | 1.1 | |||
| 1974 | 9.19 | 1.2 | |||
| 1973 | 8.04 | 1 | |||
| 1972 | 7.38 | 0.9 |
Home buyers who have a strong down payment are typically offered lower interest rates. Homeowners who put less than 20% down on a conventional loan also have to pay for property mortgage insurance (PMI) until the loan balance falls below 80% of the homes value. This insurance is rolled into the cost of the monthly home loan payments & helps insure the lender will be paid in the event of a borrower default. Typically about 35% of home buyers who use financing put at least 20% down.
As of 2025 the FHFA set the conforming loan limit for single unit homes across the continental United States to $806,500, with a ceiling of 150% that amount in areas where median home values are higher. The limit is as follows for 2, 3, and 4-unit homes $1,032,650, $1,248,150, and $1,551,250. The limits are higher in Alaska, Hawaii, Guam, the U.S. Virgin Islands & other high-cost areas. Loans which exceed these limits are classified as jumbo loans.
Homes NOT in Designated High-cost Areas
The limits in the first row apply to all areas of Alabama, Arizona, Arkansas, Delaware, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Wisconsin & most other parts of the continental United States. Some coastal states are homes to metro areas with higher property prices which qualify the county they are in as a HERA designated high-cost areas.
The limits in the third row apply to Alaska, Guam, Virgin Islands, Washington D.C & Hawaii.
| Units | 1 | 2 | 3 | 4 |
|---|---|---|---|---|
| Continental U.S. Baseline | $806,500 | $1,032,650 | $1,248,150 | $1,551,250 |
| Designated High-cost Areas | $1,209,750 | $1,548,975 | $1,872,225 | $2,326,875 |
| Alaska, Hawaii, Guam & U.S. Virgin Islands | $1,209,750 | $1,548,975 | $1,872,225 | $2,326,875 |
Can I Get a 25 Year Mortgage at Age 55?
FAQ
Can you get a 25-year mortgage?
If you want the security of a fixed interest rate and the budget flexibility that comes with lower monthly payments, a 25-year fixed mortgage could be a great option for you. Looking to refinance? A 25-year fixed mortgage is also a great refinancing option as well.
Do banks offer 25-year mortgages?
With a fixed–rate mortgage, you’ll always know what your monthly principal and interest payments will be. You can choose a 10–, 15–, 20–, 25– or 30–year term for fixed-rate mortgages.
Can you get a 25-year fixed mortgage?
“It is worth noting that 25-year fixes are already available in the UK, but receive relatively little interest. Typically, people tend to choose the product that offers the lowest rate at that time, and that’s usually a shorter-term product, such as a two or five-year fix,” he said.
Can a 46 year old get a 25-year mortgage?
There are plenty of mortgage providers who are prepared to lend to people in their 50s and you can usually get a 25-year term. You shouldn’t see a difference in the mortgage rates offered to you compared to a younger applicant, although you may be asked about your predicted retirement income.
Should you get a 25-year mortgage?
If you can find a bank that offers one, a 25-year mortgage can be a solid option. Like a 30-year term, the lower monthly payments can free up more money to put towards bills or help you save for the future. And, compared to a 30-year term, you could save more on interest in the long run.
What is a 25 year fixed mortgage?
A 25-year mortgage is a term you might not typically see. With a 25-year fixed, you’ll pay off your home loan over 25 years instead of the standard 15 or 30 years. Since it’s a fixed mortgage, you can count on the same principal and interest rate for the life of the loan. How Do I Qualify For A 25-Year Fixed Mortgage?
Is a 25-year fixed mortgage a good option?
A 25-year fixed mortgage is also a great refinancing option as well. How Do 25-Year Fixed Mortgages Work? A 25-year mortgage is a term you might not typically see. With a 25-year fixed, you’ll pay off your home loan over 25 years instead of the standard 15 or 30 years.
Is a 25-year mortgage better than a 30-year mortgage?
A 25-year mortgage often features lower interest rates than its 30-year counterpart. Easier to qualify. With a lower payment than the 15-year term option, choosing a 25-year mortgage may increase your eligibility. What should I watch out for? Taking out a 25-year mortgage does have potential pitfalls to be aware of: Limited availability.
How much does a 25 year mortgage cost?
25-year Fixed-Rate Loan: An interest rate of 7.125% (7.502% APR) is for the cost of 2.125 point (s) ($5,843.75) paid at closing. On a $275,000 mortgage, you would make monthly payments of $1,965.63. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater.
What are the benefits of a 25-year mortgage?
A 25-year mortgage offers a few useful benefits for homeowners, including: Save on interest. By paying just a little more per month, you can save tens of thousands of dollars in interest over the life of the loan. Lower interest rates. A 25-year mortgage often features lower interest rates than its 30-year counterpart. Easier to qualify.