Shopping for a mortgage is a struggle in itself, but determining which mortgage term to choose is a whole different story. While a mortgage term varies depending on the particular mortgage program you select, 15-years and 30-years terms are the most common.
We’ve outlined the differences between a 15-year mortgage and 30-year mortgage so you can decide which one is best for you.
15-year Mortgage Term
- While a 15-year mortgage offers a lower interest rate, you are given a higher monthly mortgage payment
- A 15-year term is ideal for families who plan on staying in that residence for the long haul
- With a 15-year, you are ultimately paying less by cutting down the borrowing time by half
30-year Mortgage Term
- The 30-year mortgage term is very common among first time homebuyers because it gives you more room to adjust as your early adult life changes
- Not everyone is able to afford large monthly mortgage payments. A 30-year mortgage term will allow you to make payments that you financially comfortable paying
- Because you are given a longer period to pay back your mortgage lender, the interest rates are typically higher than a 15-year mortgage term
Enough mortgage talk, basically look at it this way. You have five miles to get to your destination and you have two options. You can either be totally out of breath by sprinting there or you can leisurely take your time and walk. While both mortgage terms offer different benefits, it’s up to whether you can afford the higher monthly payments or not.
Performing a mortgage comparison is crucial and Perennial Funding is here to help! Fill out our online secure form and one of our mortgage professionals will assist you with all your questions.
You can also check out our mortgage calculator to manage how much you can afford and save. A mortgage calculator can be helpful by allowing you to review whether a 15-year mortgage or 30-year mortgage is the right interest rate/mortgage amount for you.
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