Skip to main content

The 30-year mortgage has long been the norm of the industry and for that reason; home buyers generally go for it as it gives them the chance to get the loan spread out over a long period so payment can be as low as possible.

Some buyers would consider the 15-year mortgage to be a dream home loan option if they can afford much higher monthly payments and would like to divide their mortgage time by half the normal time frame so they can save thousands of dollars in interest. In order to get along with a 15-year mortgage, the buyer will need a highly reliable source of income and enough budget should be left after every monthly payment to cover extra expenses, emergencies and savings. With the use of a 15-year mortgage, your interest rate is locked in so your payments can be the same on monthly payments. Since it is a shorter payoff period, interest payments will be much smaller.

Owning a home free and clear is the dream of everyone, the problem is being able to feel safe knowing that your home is fully paid off. I’ll list a few pros and cons of using the 15-year loan term for your financing.

  • Faster Equity Growth: The 15-year mortgage, having lower interest rates and a higher monthly payment helps to built equity faster in a short time because the principal balance is paid faster.
  • Save more Money: The interest rate is typically much lower on a 15 year, compared to a 30 year loan.


Potential Cons of the 15-Year Loan Program:

  • Higher Monthly Payment
  • More Locked Up Equity: Since you are building equity much faster, most of your money gets locked up in a pool of savings only available to be accessed by selling the house or borrowing with a HELOC or home equity loan.
  • Qualify for less home: Higher monthly payments simply means you’re qualified for less expensive properties than when the loan is stretched over the 30-year time frame for lower monthly payments.

We’d love to help you in your home-buying journey! Reach out to us for more info!

$0 Down VA Home Loans:
Are you a Veteran?