The Difference Between a 15-Year and 30-Year Fixed Mortgage

(Video Transcript)

When you’re buying a home, there are many loan options to consider. Two of the most common mortgage options are 15-year and 30-year fixed mortgages. As the names suggest, the number of years it takes to pay off these mortgages differs. But there are other differences to consider too. Let’s take a look.

15-Year Mortgages

  • Often have lower interest rates.
  • And, they require a higher payment each month.
  • But, when you consider interest costs, 15-year mortgages can end up costing less overall than a 30-year mortgage.

On the other hand, 30-Year Mortgages

  • Have a lower monthly payment, which is the primary benefit of this option because it enables buyers to:
    • Afford more home than they could with a 15-year loan.
    • Have money each month to use toward other savings goals.

Keep the benefits of each mortgage in mind when you’re buying a home. Consult your mortgage lender to see which option is best for you.

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