A 15-year mortgage usually comes with significantly higher monthly payments than a traditional 30-year loan for the same amount.
On the other hand, your interest rate will usually be a bit lower, and since you’re borrowing money for a shorter time, the total amount you pay in interest may be tens of thousands or even hundreds of thousands of dollars less.
Depending on the market in which you’re purchasing your home, you might expect to build equity faster and can have the loan paid off in half the time. If you can afford the higher payments, a 15-year mortgage may be an attractive option.
Online resources like an online financial calculator or resource articles can help you determine if a 15-year mortgage or 30-year mortgage is a better fit for you.
About the Author
Cam Merritt has been a professional writer and editor since 1992, specializing in articles about personal finance and law. Merritt has a Bachelor of Arts in journalism from Drake University.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc. © 2013 ConsumerInfo.com, Inc. All rights reserved.