Mortgage Term Wisely

Choose Your Mortgage Term Wisely: 15 or 30 Years?

When house hunting, it’s important to consider not only mortgage rates, but also different kinds of loans and their associated costs. Most mortgages have lengths of either 15 or 30 years, with the former being the more common option.

Is a loan with a 15-year or 30-year duration better? A 15-year mortgage has much lower interest costs in the long run if you can make the payment. A 30-year mortgage has a smaller monthly payment, but it may provide you greater freedom if your financial circumstances change.

Find out the differences between 15- and 30-year mortgages, along with the benefits and drawbacks of each.

When Choosing Between a 15-Year and 30-Year Mortgage, What Factors Should Be Considered?

The amount of time it takes to pay off a loan is the main distinction between a 15-year mortgage and a 30-year mortgage.

With a 15-year mortgage, you may pay off your home in half the time and spend less on interest. Because of this, 15-year loans have lower interest rates than 30-year loans.

Due to the shorter term, more of each payment goes toward principal, helping you build equity faster. At today’s interest rates, the monthly payment is roughly 30% more than a 30-year mortgage.

Thanks to a 30-year loan’s reduced monthly payment, you may have more financial flexibility.

The 30-year mortgage spreads out the payback, making the property appear more reasonable.

Advantages and Disadvantages of 30-Year Mortgages


  • Due to the loan’s longer term, the monthly payment is reduced below that of a 15-year loan. Borrowers who choose 30-year mortgages have the flexibility to make extra principal payments if they so want. This may be more difficult to do with a 15-year mortgage’s larger monthly payments.
  • This loan is more accessible due to its lower monthly installments.
  • Save more money and have more flexibility in your budget.


  • Lenders see 30-year loans as riskier than 15-year ones, so they charge higher interest rates.
  • Larger overall interest expense.
  • Equity accumulation is smaller compared to a 15-year mortgage.

Advantages and Disadvantages of 15-year mortgages


  • Less risk for the lender means lower interest rates compared to 30-year loans.
  • The total interest paid is less than what you’d pay on a 30-year mortgage.
  • Accelerated loan repayment. Compared to a standard 30-year mortgage, you’ll own your house in half that time.
  • Equity appreciation increased. You pay less interest and more principal.


  • Greater expense per month compared to a debt-financed over 30 years.
  • Paying back a larger loan each month might affect how much money you can borrow overall.
  • The ability to save or pursue other financial objectives is hampered by larger payments.

The Differences Between a 15-Year and 30-Year Mortgage and How to Choose Which Is Best for You

Financial requirements and flexibility should determine a 15- or 30-year mortgage length. If you can afford the monthly payments, additional expenses, and emergency requirements, a 15-year mortgage may save you money.

Age may affect your 15-year mortgage eligibility. Thinking about retiring in 15 years without a mortgage. A 40-year-old may pay off a 15-year mortgage by 55, whereas a 70-year-old would still be paying on a 30-year mortgage.

If you’re undecided about a 15-year mortgage, go with a 30-year loan. For apprehensive first-time homeowners, Krichmar recommends a 30-year mortgage.

Increase your monthly payment or refinance into a 15-year loan to pay off your mortgage quicker ( If you wish to prepay your debt, check with your lender.

First-time buyers who don’t know the entire cost of a property may profit from a 30-year mortgage as well. This loan may help you handle unforeseen expenditures like a new baby or a spouse’s retirement. Use a mortgage payment calculator to calculate before deciding.

30-year mortgages are more cost-effective than 15-year loans, which is why they are more common. If you’re worried about your financial future or know a 15-year mortgage will make your dream property unaffordable, the lesser payment will provide you more flexibility.

If a 15-year mortgage strains your finances, consider a 30-year one.

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Christophe Rude

Christophe Rude

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