30-Year vs. 15-Year Mortgage Terms
Typically, a 30-year mortgage term will have lower monthly payments than a 15-year mortgage term. If you decide on a 15-year loan, you will pay significantly
less in total interest over the life of the loan, but your monthly mortgage payments will be higher. As a homebuyer, you will
need to consider the implications of supporting higher monthly payments when accepting a 15-year term. Can you consistently
meet those monthly payments over time? Look at the table below.
|
Advantages |
Considerations |
| 15-Year |
Lower Overall Mortgage Cost |
Higher Monthly Payment |
| Builds Equity Faster |
Must Qualify for Higher Monthly Payment |
| You have Debt for Only 15 Years |
You have Less Cash for Other Expenses |
| Lower Interest Rate |
Less Money goes toward Tax Deductions |
| 30-Year |
Lower Monthly Payment |
Higher Overall Mortgage Cost |
| Qualifying is Easier |
You Pay More in Overall Interest |
| You have More Cash for Other Expenses |
You have Debt for 30 Years |
| More Money goes toward Tax Deductions |
Higher Interest Rate |
