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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.

Is a 15- or 30-year mortgage better?

Although the monthly payments on 30-year mortgages are lower than they are for 15-year loans, the interest is higher, and it takes twice as long to pay off. So while you pay higher monthly payments for a 15-year mortgage, you’re paying off more principal sooner. That means going with a 15-year mortgage can save you thousands over the life of the loan.

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When should you consider a 15-year fixed-rate mortgage?

A 15-year fixed-rate mortgage can be attractive because it has a lower interest rate and a shorter lifespan. The fixed rate allows you to set a budget without surprises from rising interest rates. But to take advantage of these perks, you have to be able to afford the higher monthly payment that comes with them. Plus, because the payments are higher, it’s more difficult to qualify for this type of loan. In short, if you can qualify and afford the higher monthly outlay, the 15-year fixed mortgage can be a great way to save money when you buy a home.

When should you consider a 30-year fixed-rate mortgage?

A 30-year mortgage is common for several reasons. One, homeowners can usually deduct the mortgage interest on their taxes. And, especially in the first years of the loan, when most of the monthly payments are allocated toward interest, that can be a significant benefit. Plus, the monthly payments are lower and easier to manage. This makes a 30-year easier to qualify for compared to a 15-year mortgage. The 30-year can be a good option if you plan to stay in the home for several years and can’t afford a 15-year mortgage. Remember, if your financial situation improves, you may be able to start with a 30-year mortgage and refinance to a shorter term down the road.

There are several differences and considerations to keep in mind when choosing between a 15-year mortgage and a 30-year mortgage. You’ll need to weigh the differences to see whether you benefit more from a shorter term and higher payments, or a longer term with lower payments. Also consider whether your financial and living situations may change. For instance, how long you might live in the home. For more personalized recommendations, use the KeyBank mortgage payoff calculator or mortgage qualification calculator.