15- vs. 30-Year Mortgage: Which Is Right for You?

Choose the right financing terms for your home sweet home.

Derek Eads

A mortgage is likely the largest—and longest—loan you’ll take out in your life. But just how long should it be? There is much to consider in the 15- vs. 30-year mortgage debate. Explore what each option has to offer and decide which is the right choice for you.

15- vs. 30-Year Mortgage: Pros of each

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15 year: Since you are borrowing money for less time, you’ll pay a lot less interest over the life of the loan. Plus, you typically will get a lower interest rate.

30 year: Spread out over a longer time, these loans have lower monthly payments—which could help you qualify for a higher-priced home.

15- vs. 30-Year Mortgage: Cons of each

15 year: You’ll have higher monthly payments than with a 30-year loan for the same amount. Payments too high? You may have to settle for less house or a longer loan.

30 year: After a few years, you’ll have less equity built up than if you’d been making the higher payments of a 15-year loan. You’ll also end up paying more interest over time.

15- vs. 30-Year Mortgage: Good to know

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15 year: As you get closer to retirement, a 15-year mortgage that you can pay off before you stop working may be a smart choice.

30 year: You can pay your loan off sooner by paying extra each month—and you can go back to the lower payment when you need to.


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