15- or 30-year Mortgage: Which Is Right for You?
Is a 15- or 30-year mortgage best for you? We can help you decide.
Let’s start with a 15-year mortgage.
These loans help you build equity fast, paying off the home in just 15 years.
The interest rate is typically lower than a 30-year mortgage, which could mean paying around $120,000 less in interest on a $350,000 loan with a 15-year.
That means more money in your pocket.
But to pay off a loan in half the time, you’ll have higher monthly payments which may tighten your monthly budget and limit your home options.
It also makes these loans a little harder to qualify for.
That’s why 30-year mortgages are appealing for many buyers.
The monthly payments are lower than with a 15-year, which gives you more flexibility in how much house you can afford.
And they’re generally easier to qualify for than 15-year mortgages.
But they have higher interest rates, and more of your payments go toward interest.
That means it will take longer to build up equity than a 15-year mortgage.
So, if you don’t mind making higher monthly payments, you can pay off a home faster with a 15-year mortgage.
Or if you need a bigger home or more financial flexibility, consider a 30-year mortgage.
If you need help choosing which loan is right for you, contact a KeyBank Mortgage Loan Officer.
As the names suggest, the main distinction between a 15-year and 30-year mortgage is the length of the terms. That may seem minor, but the difference in term range can have major cost implications.