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15-year vs. 30-year mortgage

Lower interest versus lower monthly payments

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Written by Josh Richner
Edited by Cassidy McCants
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Buying a home is one of the most significant decisions a person makes in their lifetime. It can be exciting and rewarding, but it's also complicated. On top of finding the perfect home, you also have to tackle the question: What kind of mortgage should I take out?

With almost any type of mortgage, you make monthly payments over a specified period until you pay off the entire debt, at which point you own your home free and clear. There are several home loan options to choose from, including those with fixed and adjustable rates, and picking the right loan term for you is an important part of your decision-making process.

Often, you’ll be choosing between a 15-year and a 30-year mortgage term. Read on to see the benefits and drawbacks of each.

15-year mortgage pros and cons

If you want a shorter-term mortgage, a 15-year loan might be the way to go. Loans with shorter terms often allow for lower interest rates as well as faster repayment. A 15-year mortgage also helps you build equity in the home more rapidly because more of the payment goes toward the principal balance.

However, the monthly payments are higher with this type of loan. Though this increase is designed to suit the shorter overall payment period, it can be difficult for some borrowers to pay more per month, even if it means saving in the long run.

It can be more challenging to qualify for a 15-year mortgage because your income must support the higher monthly payment. A shorter term can also limit your buying options — you might not be able to afford the house of your dreams over the course of just 15 years.

Pros

  • Short repayment period
  • Less interest paid over the life of the loan
  • Build equity quickly

Cons

  • Higher monthly payments
  • More difficult to qualify
  • Can limit houses you’re able to consider

30-year mortgage pros and cons

Mortgages with a 30-year term are popular among borrowers — they come with a lower monthly payment and give homebuyers more time to repay the loan in total. With a longer repayment period, though, you end up paying more in interest over the life of the loan.

A 30-year mortgage might be better if a lower monthly payment is more important to you than total paid overall — and as long as there are no prepayment penalties, you can always pay extra to speed up your repayment.

It is easier to qualify for a 30-year mortgage than a 15-year mortgage because of the lower monthly payment amounts — as long as you have decent credit and can make the monthly payment, you shouldn’t be too much of a risk to a lender.

Lower monthly payments also mean you can consider higher-price homes you wouldn’t qualify for with a 15-year mortgage.

Pros

  • Lower monthly payment
  • Easier qualification
  • More options for higher-value homes

Cons

  • Higher interest rate
  • Longer repayment period
  • Slow to build equity

Best mortgage term length for you

So, which mortgage term is best for you? This depends on your particular financial situation and goals.

A 30-year mortgage has a lower monthly payment than a 15-year mortgage — but also a higher interest rate.

A 15-year mortgage is a good option if you'd like to pay off your home as quickly as possible — and if you have the money to make a higher monthly payment. If you want to be in the clear before a significant life situation, like your retirement or the kids going off to college, a 15-year loan might be a good fit.

On the other hand, a 30-year mortgage may be the better choice if you want to keep your monthly payments low. If you have an inconsistent income stream, like a commission-based job or freelance work, this can be a safer bet, as not everyone can afford the higher monthly payments that come with a shorter loan term.

Everyone has a unique financial situation. To make a confident decision, carefully evaluate your circumstances and your long-term goals.

Current mortgage rates

Rates are effective 06/25/2022 and are subject to change without notice. APR shown is provided by a partner of ConsumerAffairs.

ProductAPR
5.984%0.04%Get Rates

The APR shown of 5.984% is available for a 30-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.007%0.04%Get Rates

The APR shown of 5.007% is available for a 15-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.691%0.1%Get Rates

The APR shown of 5.691% is available for a 30-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.751%0.11%Get Rates

The APR shown of 5.751% is available for a 15-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.079%0.03%Get Rates

The APR shown of 5.079% is available for a 30-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.041%0.09%Get Rates

The APR shown of 5.041% is available for a 15-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.


Current refinance rates


ProductAPR
5.923%0.0%Get Rates

The APR shown of 5.923% is available for a 30-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

4.925%0.0%Get Rates

The APR shown of 4.925% is available for a 15-year fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.998%0.04%Get Rates

The APR shown of 5.998% is available for a 30-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

5.543%-0.1%Get Rates

The APR shown of 5.543% is available for a 15-year FHA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

4.951%-0.25%Get Rates

The APR shown of 4.951% is available for a 30-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

4.787%-0.47%Get Rates

The APR shown of 4.787% is available for a 15-year VA fixed rate loan in the amount of $200,000 for consumers with loan-to-value of at least 80%.

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Help me Decide

Bottom line: Should you get a 15-year or a 30-year mortgage?

The best mortgage term length for you will ultimately come down to your unique financial situation and goals. There are benefits and drawbacks to both types of mortgages.

A 15-year mortgage is great if you’re willing — and able — to pay more monthly to save over the long run or if you want to pay off your home as quickly as possible.

The 30-year mortgage is best if you want to keep your monthly expenses lower or get into a higher-value home, even if this means paying more over time.

Consider what you can afford and what’s most important to you in terms of paying off your loan — the mortgage that better aligns with your financial priorities and circumstances is probably the winner.

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