WASHINGTON - Homeowners coming into the mortgage market to refinance are almost as likely to choose a 15-year fixed product as a 30-year fixed mortgage, according to the Federal National Mortgage Association.

Among refinancings bought or securitized by Fannie Mae in August, 42% were for 15 years and 47% for 30 years.

Looking to the Future

"The fact that 30-year and 15-year loans are running almost neck and neck for people refinancing is solid evidence that when mortgage rates are low, most homeowners and homebuyers look to the future and decide to lock in a fixed rate and often decide to pay off their loans faster," said Donna Callejon, Fannie Mae senior vice president for single-family marketing.

Lenders in the field concur. "People are looking to get their house in order from the standpoint of debt and that is leading them to choose 15-year loans," said Tom Brown, chief executive officer of Centerbank Mortgage Co., Waterbury, Conn.

Since 15-year loans amortize more quickly than 30-year mortgages, the end result is higher monthly payments but less interest.

Mr. Brown, whose mortgage bank originated more than $1.5 billion last year, believes that 15-year loans have been growing steadily in popularity for about a year.

The move toward 15-year fixed rate mortgages is more striking when seen in the context of the spread between 15-year and 30-year mortgages, according to Randall Weber, executive vice president of Seattle Mortgage Co.

While the spread is now about 40 basis points, two years ago the margin was more in the range of 100 to 125 basis points, according to Mr. Weber.

Glenn Wilson, president of Knutson Mortgage Corp., Bloomington, Minn., believes that much of the enthusiasm for 15-year mortgages is concentrated in younger consumers.

"My daughter came to me to refinance and, despite the fact that she could have had a much lower payment on a 30-year, insisted on a 15-yearr mortgage," he said. "The thinking is that if you can retire your mortgage before the kids go to college or you retire, well, that's great."

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