30-Year Mortgage vs 15-Year Mortgage

When it comes to buying a home, one of the most important decisions to make is choosing the right type of mortgage loan. One of the main choices is between a 15-year mortgage loan and a 30-year mortgage loan. While both options have their pros and cons, there are several reasons why a 15-year mortgage loan may be the better choice for many home buyers.

The first and most obvious benefit of a 15-year mortgage loan is that it has a much shorter repayment period than a 30-year mortgage loan. This means that you will pay off your mortgage much faster and become a homeowner sooner. With a 15-year mortgage, you will have the ability to pay off your home loan in half the time of a 30-year mortgage and will save you thousands of dollars in interest over the life of the loan.

Another benefit of a 15-year mortgage loan is that it typically has a lower mortgage rate than a 30-year mortgage loan. This is because the lender takes on less risk with a shorter loan term and can offer a lower rate. This can save you a significant amount of money over the life of the loan, as the interest rate is one of the biggest factors that determines the overall cost of your mortgage.

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

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The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #2059741

5.606%

15-Year Fixed

5.490%

$3,032

Includes 0.758 points for $3,032

Lender Fees: $0

$3,267 /mo

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NMLS #757416

5.630%

15-Year Fixed

5.490%

$3,648

Includes 0.912 points for $3,648

Lender Fees: $0

$3,267 /mo

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NMLS #1025894

5.650%

15-Year Fixed

5.490%

$4,172

Includes 0.868 points for $3,472

Lender Fees: $700

$3,267 /mo

Next >

NMLS #324599

License: 324599

5.673%

15-Year Fixed

5.500%

$4,570

Includes 0.875 points for $3,500

Lender Fees: $1,070

$3,269 /mo

Next >

NMLS #324599

License: 324599

6.494%

30-Year Fixed

6.375%

$5,070

Includes 1.000 points for $4,000

Lender Fees: $1,070

$2,496 /mo

Next >

NMLS #2059741

6.569%

30-Year Fixed

6.490%

$3,292

Includes 0.823 points for $3,292

Lender Fees: $0

$2,526 /mo

Next >

NMLS #757416

6.590%

30-Year Fixed

6.500%

$3,744

Includes 0.936 points for $3,744

Lender Fees: $0

$2,529 /mo

Next >

NMLS #1025894

6.600%

30-Year Fixed

6.490%

$4,592

Includes 0.973 points for $3,892

Lender Fees: $700

$2,526 /mo

Next >

NMLS #399799

6.722%

30-Year Fixed

6.625%

$4,184

Includes 0.714 points for $2,856

Lender Fees: $1,328

$2,562 /mo

Next >

NMLS #401822

6.734%

30-Year Fixed

6.625%

$4,495

Includes 0.625 points for $2,500

Lender Fees: $1,995

$2,562 /mo

Next >

NMLS #324599

License: 324599

6.743%

5-Year ARM

6.625%

$4,954

Includes 0.971 points for $3,884

Lender Fees: $1,070

$2,562 /mo

Next >

NMLS #401822

7.698%

15-Year Fixed

7.375%

$8,000

Includes 1.000 points for $4,000

Lender Fees: $4,000

$3,680 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

A 15-year mortgage loan also helps you to build equity in your home much faster. As you make payments on your mortgage, a portion of each payment goes towards paying down the principal. With a 15-year mortgage, you will be paying down the principal at a much faster rate than with a 30-year mortgage, which means that you will have a higher percentage of equity in your home in a shorter period of time.

Additionally, a 15-year mortgage loan can also help you to achieve financial stability and security faster. When you have a shorter loan term, you will have less debt and will be able to save and invest more money in the future. This can also help you to achieve other financial goals, such as saving for retirement or paying for your children's education.

Furthermore, a 15-year mortgage loan can also provide you with more flexibility. With a shorter loan term, you will have more options when it comes to refinancing or selling your home. This can be especially beneficial if interest rates fall or if you need to move for a job or other reason.

It's important to mention that with a 15-year mortgage loan, the monthly payments will be higher than a 30-year mortgage loan, so you should be financially prepared for that. Also, it's important to consider your personal financial situation, and make sure that you can afford the monthly payments before deciding on a 15-year mortgage loan.

In conclusion, a 15-year mortgage loan has several advantages over a 30-year mortgage loan, including a shorter repayment period, lower interest rates, faster equity building, financial stability, flexibility and lower total interest payments. While the monthly payments may be higher, the overall cost of the loan will be much less. It's essential to evaluate your personal financial situation before making a decision, but for many home buyers, a 15-year mortgage loan is the better choice.