On this page
- Can you get a 5-year mortgage in the US?
- How to build your own 5-year mortgage with a 15-year loan
- 5-year balloon loans
- Is a 5-year ARM the same as a 5-year mortgage?
- What a “5-year fixed” means in Canada
- Who a 5-year mortgage payoff fits, and who it does not
- Closing costs and your rate
- 5-year mortgage FAQ
- Start with a 15-year quote and a payoff plan
Yes, you can get a 5-year mortgage in the US, but a true 5-year fixed-rate loan that you pay off in five years is rare. A few banks and credit unions make them from their own funds, and the terms vary by lender. Most borrowers who want a five-year payoff get the same result with a 15-year fixed loan and extra monthly payments.
This guide shows where short terms exist and what a five-year payoff costs at October 2026 rates. It also explains two loans that carry a “5-year” label, the 5-year balloon loan and the 5-year ARM. Neither one works like a loan you pay down to zero with five years of level payments.
Can you get a 5-year mortgage in the US?
You can, but few lenders offer one. Most US lenders sell their fixed-rate loans to Fannie Mae or Freddie Mac. As a result, the products lenders offer follow the agencies’ rules, and those rules start at longer terms.
Why 5-year fixed-rate mortgages are rare
Freddie Mac lists its eligible fixed-rate products as 10-, 15-, 20- and 30-year fully amortizing loans. Fannie Mae’s Selling Guide pools fixed-rate loans with original terms as short as 85 months, a little over seven years. So the shortest conforming fixed term most lenders sell is usually 10 years. A 60-month term is shorter than any product on Freddie Mac’s list and shorter than Fannie Mae’s shortest pool.
That means a lender that makes a 5-year fixed mortgage has to hold it on its own books. The industry calls this a portfolio loan. Demand is small, too, because a five-year schedule more than doubles the payment of a 15-year loan (see the example below).
Where to look for a 5-year fixed mortgage
Start with local banks and credit unions that keep loans in portfolio. Some offer short fixed terms, often to refinance a small balance. Because each lender writes its own rules, the rate, fees, minimum loan amount and down payment vary.
A mortgage broker who works with several portfolio lenders may also find one. When you call, ask these questions:
- Does the loan pay off fully over five years, or does it end with a balloon payment?
- Is the rate fixed for the full term?
- Does the note carry a prepayment penalty?
- What are the closing costs?
8-year and 10-year fixed loans
The next-shortest terms are easier to find. Rocket Mortgage (formerly Quicken Loans) offers its YOURgage loan with a fixed rate and a term the borrower picks from 8 to 29 years. Many other lenders offer a 10-year fixed, the shortest term on Freddie Mac’s list of standard fixed-rate products. You can also prepay either loan to finish in five years.
How to build your own 5-year mortgage with a 15-year loan
The do-it-yourself route works with any fixed-rate loan that allows prepayment. First, you take a 15-year (or 30-year) fixed mortgage. Then you pay enough extra principal each month to clear the balance in 60 months. The note still sets a lower required payment, so the extra amount stays voluntary.
The numbers on a $300,000 loan
Say a buyer borrows $300,000. The rates come from Freddie Mac’s Primary Mortgage Market Survey (PMMS) for October 22, 2026: 6.68% for a 15-year fixed and 7.32% for a 30-year fixed. The figures cover principal and interest only. Property taxes, homeowners insurance, mortgage insurance and HOA dues are extra.
| $300,000 loan | Monthly principal and interest | Total interest |
|---|---|---|
| 15-year fixed at 6.68%, paid on schedule | $2,643.10 | $175,758 |
| 15-year fixed at 6.68%, paid off in 5 years | $5,895.17 | $53,710 |
| 30-year fixed at 7.32%, paid on schedule | $2,060.79 | $441,885 |
| 30-year fixed at 7.32%, paid off in 5 years | $5,985.76 | $59,145 |
On the 15-year loan, the five-year payoff takes $3,252.07 a month on top of the required payment. In return, the borrower saves $122,048 in interest compared with the full 15-year term. For a $150,000 loan, halve every dollar figure in the table.
Why a 15-year loan usually makes the better base
The 30-year loan carries a higher rate. Therefore, the same five-year payoff costs more each month and more in total interest. A 15-year loan is usually the better base, as long as the borrower can qualify for its $2,643.10 required payment.
The required payment also works as a floor. After a job change, a large repair or a bad month, the borrower can drop back to $2,643.10 and stay current. In contrast, a true 5-year loan at the same 6.68% rate would require the full $5,895.17 every month, with no such cushion.
How the required payment affects qualifying
Lenders size your debt-to-income ratio (DTI) on the required payment. DTI is your monthly debt payments divided by your gross monthly income. A true 5-year mortgage at about $5,900 a month puts far more into that ratio than a 15-year loan at $2,643.10. As a result, the 5-year loan needs much more income to qualify. Our debt-to-income ratio guide explains how lenders figure it.
Check the note for a prepayment penalty
Federal rules allow a prepayment penalty only on certain fixed-rate qualified mortgages that are not higher-priced, and no penalty can apply after the third year. Even so, confirm with the lender before closing that your note has no prepayment penalty.
Recasting and refinancing to a shorter term
A recast is a related option. You pay a lump sum toward principal, and the servicer re-amortizes the loan over the remaining term, which lowers the required payment. Not every servicer or loan type offers a recast, and fees vary.
Refinancing to a shorter term is the other route. However, it locks in a higher required payment and adds closing costs. The PMMS 15-year average was 6.68% on October 22, 2026, up from 5.44% a year earlier. So a borrower who already holds a lower rate may do better prepaying the current loan. For more ways to finish early, see how to pay off your mortgage early and how prepayments save you money.
Before you set a payoff plan, compare 15-year quotes from several lenders.
5-year balloon loans
Some portfolio lenders offer a 5-year balloon loan, often for land, investment property or commercial property. The payments are figured on a longer schedule, such as 15 or 30 years, so they stay lower. Then the remaining balance comes due in one large balloon payment at the end of year five.
The main risk is the refinance. If rates have risen, the property’s value has dropped or your income has changed, you may not be able to refinance or sell in time to cover the balloon.
Under the CFPB’s ability-to-repay rule, a Qualified Mortgage (QM) generally can’t include a balloon payment. The exception covers certain small creditors that lend in rural or underserved areas. Their balloon QMs need a fixed rate, a term of at least five years and payments based on an amortization of no more than 30 years.
Is a 5-year ARM the same as a 5-year mortgage?
No. A 5-year adjustable-rate mortgage (ARM) fixes the rate for the first five years, but the loan term is usually 30 years. Today it is typically a 5/6 SOFR ARM. The rate holds for five years and then adjusts every six months.
After the fixed period, the new rate equals an index plus a margin. Fannie Mae and Freddie Mac require the 30-day Average SOFR as the index. The lender and the product set the margin, and both agencies cap it at 3.00%. Rate caps then limit each change. On Fannie Mae’s standard 5/6 SOFR ARM, the caps are 2/1/5: up to 2 percentage points at the first change, 1 point at each later change and 5 points over the life of the loan.
For a conforming ARM run through Fannie Mae’s Desktop Underwriter (DU), the maximum loan-to-value ratio is 95% on a primary-residence purchase, or 5% down. For a second home, it is 90%, or 10% down.
An ARM can suit a buyer who expects to sell or refinance within five years. Still, the balance remains when the fixed period ends. For more depth, read how an ARM works, 5-year ARMs for first-time buyers and adjustable vs. fixed-rate mortgages.
What a “5-year fixed” means in Canada
Canadian lenders use “5-year fixed” differently. In Canada, the term is the length of the mortgage contract and its rate, while the amortization period sets the payoff schedule. A 5-year fixed term usually sits on an amortization of 25 years or more, and the borrower must renew at the end of each term. So a Canadian 5-year fixed works more like a US 5-year ARM or a balloon loan than a loan paid off in five years.
Who a 5-year mortgage payoff fits, and who it does not
A five-year payoff suits a borrower with high, steady income or a small balance. It also works best when an emergency fund is full and retirement savings are on track before extra dollars go to the mortgage.
It fits less well in these cases:
- Thin cash cushion. Money sent to principal is hard to get back. You would need a cash-out refinance or a home equity loan, at whatever rate applies then.
- Retirement savings behind. An employer 401(k) match may be worth more than the interest saved.
- Opportunity cost. Each extra dollar saves interest at the mortgage rate, a guaranteed return. Investing the same money could earn more or less, with risk.
- Uneven income. A commission or seasonal earner may value the lower required payment on a 15-year loan.
The right mix depends on your full finances. Our 15-year vs. 30-year comparison and home affordability guide can help you test the numbers.
Closing costs and your rate
Every loan in this guide carries closing costs, so add them to any comparison; see how much closing costs are. Your rate depends on your credit, down payment, loan amount and term, and today’s mortgage rates shows current averages.
5-year mortgage FAQ
Can you get a 5-year mortgage?
Yes, from some banks and credit unions that hold the loan in their own portfolio. They are rare because the standard fixed-rate products of Fannie Mae and Freddie Mac start at longer terms. Most borrowers reach a five-year payoff by prepaying a 15-year loan.
What is the shortest mortgage term?
The shortest fixed term most lenders sell is usually 10 years, the shortest standard fixed product Freddie Mac lists. Some lenders go shorter; Rocket Mortgage’s YOURgage starts at 8 years. A 5-year term usually means a portfolio loan or a balloon loan.
Is a 5-year ARM the same as a 5-year mortgage?
No. A 5-year ARM fixes the rate for five years, but the loan usually runs 30 years. On a 5/6 ARM, the rate then adjusts every six months.
Can I pay off a 30-year mortgage in 5 years?
Yes, if the note has no prepayment penalty. On a $300,000 loan at 7.32% (PMMS, October 22, 2026), it takes $5,985.76 a month in principal and interest. A 15-year loan at 6.68% gets there for $5,895.17 a month, with less total interest.
Start with a 15-year quote and a payoff plan
For most borrowers, the practical 5-year mortgage is a 15-year fixed loan with planned prepayments. It keeps a lower required payment as a safety net and makes qualifying easier, while the extra payments shorten the payoff.
Next, get 15-year quotes from two or three lenders and confirm that each note has no prepayment penalty. Then use the quoted rate to set your monthly payoff amount. If a local bank or credit union offers a true 5-year loan, compare its rate and fees with that plan.
