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?

15-Year Mortgage Advantages:

• Lower Overall Mortgage Cost
• Builds Equity Faster
• You have debt for only 15 years
• Lower Interest Rate

15-Year Mortgage Disadvantages:

• Higher Monthly Payment
• Must qualify for higher monthly payment
• You have less cash for other expenses
• Less money goes toward tax deductions

30-Year Mortgage Advantages:

• Lower Monthly Payment
• Qualifying is easier
• You have more cash for other expenses
• More money goes toward tax deductions

30-Year Mortgage Disadvantages:

• Higher Overall Mortgage Cost
• You pay more in overall interest
• You have debt for 30 years
• Higher interest rate