Which mortgage has an interest rate reduction of 0.25% for every 1% of the loan amount?

The mortgage that offers an interest rate reduction of 0.25% for every 1% of the loan amount typically refers to a specific type of structured loan or a particular program commonly associated with shorter-term loans. In this case, the 15-year mortgage is often designed to incentivize borrowers with lower interest rates compared to longer terms.

Shorter-term loans, like the 15-year mortgage, tend to have lower interest rates as borrowers are committing to pay off the loan more quickly, resulting in less risk for lenders. This setup often allows borrowers to benefit from the accelerated equity build-up and significant interest savings over the life of the loan. The specific reduction based on a proportionate percentage of the loan amount highlights the financial incentives such loans can provide, especially in relation to overall borrowing costs.

In contrast, longer-term loans such as the 30-year, 20-year, and even the 10-year typically do not offer the same level of interest rate reductions or incentives connected to the loan amount, and their structures may not align with the same interest-saving strategies. Thus, the characteristics that distinguish how and why the 15-year mortgage adjusts its rates uniquely qualify it as the option with the stated reduction in interest rates based on the loan amount