Do most Americans have a 30 year mortgage?
Payoffs also depend on interest rates, what a person put down on the original mortgage and refinance deals. It's called a mortgage. Most people get a 30-year mortgage, though 15-year mortgages are also pretty common. A lot of people pay it off in less than 30 years.
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.
In fact, according to Census Bureau data, nearly 40% of Americans already have. But are you really better off paying off your home mortgage, or are there strategies you can employ to put yourself ahead even more?
A 30-year mortgage can make your monthly payments more affordable. While monthly payments on a 15-year mortgage are higher, the cost of the loan is less in the long run.
However, most homeowners won't keep their original loan for 30 years. Many either refinance the loan or move out before the mortgage term is up. The average mortgage length is about 10 years, according to a 2023 report on buyer and seller generational trends from the National Association of REALTORS® (NAR).
| 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 |
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.
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
If you are under 45, it's difficult to argue that your dollars would be better served paying off your mortgage unless you are on Step 9, pre-pay low-interest debt. You should aim to be completely debt-free by retirement, and after age 45 you can begin thinking more seriously about pre-paying your mortgage.
What mortgage does Dave Ramsey recommend?
A: Dave Ramsey recommends a 15-year, fixed-rate conventional loan.
If it's expensive debt (that is, with a high interest rate) and you already have some liquid assets like an emergency fund, then pay it off. If it's cheap debt (a low interest rate) and you have a good history of staying within a budget, then maintaining the mortgage and investing might be an option.
The 30-year term is the most popular option, but it's far from the only one. Depending on the lender you work with, you might be able to apply for fixed-rate loans amortized over anywhere from eight to 29 years.
The typical U.S. homeowner spends 12.3 years in their home.
There are plenty of reasons why homeowners leave their home so soon after their first purchase – especially for young people. Despite the common expectation that a home purchase is forever, most buyers will end up leaving their homes within 5-10 years.
The Average Time People Spend in Their First Home Before Purchasing Their Second: According to recent data, the average length of time people spend in their first home before purchasing their second is about 7-10 years.
It's possible that rates will one day go back down to 3%, though if current trends hold that's not likely to happen anytime soon.
Who is the nation's largest mortgage lender? Rocket Mortgage is the largest mortgage lender in the United States, originating 464,363 mortgages worth $127.6 billion in 2022. Who is the largest non-bank mortgage lender?
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.
Absolutely. The Equal Credit Opportunity Act's protections extend to your mortgage term. Mortgage lenders can't deny you a specific loan term on the basis of age.
At what age do banks stop giving 30-year mortgages?
Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.
Many factors play a role in mortgage eligibility — but age isn't one of them. Thanks to the Equal Credit Opportunity Act, it's against the law to discriminate against a credit applicant because of age (unless you're too young to sign a contract).
The average debt an American owes is $104,215 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans. Data from Experian breaks down the average debt a consumer holds based on type, age, credit score, and state.
In 2022, researchers found that just over 40 percent of homeowners older than 64 had a mortgage, a jump from roughly 25 percent a generation ago.
Average American Debt Load
That breaks down into $241,815 on average in mortgage debt, and an average of $23,317 in non-mortgage debt (including credit card, student loan, auto loan and personal loan debt). But these debt balances vary greatly depending on age group.
